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Good afternoon. I'd like to call the May meeting of the Central Arizona Groundwater replenishment district and underground storage committee to order, and I would like to ask Ms. Megan to call the roll please.

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Karen Cesar here, Lisa Atkins, it's not here, Rudy Fisher, Pat Jacobs, it's not yet with us,

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Steve Miller, Robert C. A. Go. Here, we have a core and madam chair.

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Great, thank you very much. I'd like to remind all speakers to identify themselves for

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the record if you do come up to the podium, and our first item on our agenda is the consideration

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of action to approve the minutes of our April 17th, 2025, the CHRD and Underground Storage Committee

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and the Terrible Intertain Emotion from somebody. Madam Chair, I'd like to make a motion.

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To entertain a motion to approve the minutes of the April 17th. Second. Thank you. Motion

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in second. Any comments or questions? If not, I'll in favor, please say aye. Aye.

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All right. Let the record reflect. All members present, voted in favor of the

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Next item on our agenda, just for information, not scheduled for action, is a report on the 2025 proposed legislation with potential impacts to CAGRD and underground storage, and for that we have our director of legislative affairs, Mr. Jeff Gray and welcome.

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Good afternoon, Madam Chair, warm welcome to the record Jeff Gray,

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I'm going to say the fair manager, so I will jump right and

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so first off good news.

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I think I've talked with a number of you about this already, but our bill,

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House Bill 2691, which amends the annual membership news calculation for

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number lands was signed by the governor on May 7th, so that is now official.

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I will say that I shouldn't say official in the sense of the actual law itself yet while

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same with the governor. All legislation, unless it's an emergency clause, is not effective

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until 90 days after the date of the legislature signing dies. So you have to add those

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days basically once the legislature wraps up and then it officially becomes law but as of right

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now it has been signed with the governor so that is positive news and we will have the exact

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effective date once the legislature signing dies for the year which at this point is somewhat

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the air. It's whenever they agree on a budget and wrap up for the air, which, unfortunately,

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right now, my crystal ball is kind of shady right now, so it's not a lot of idea when that's

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going to be wrapped up yet, unfortunately, so I wish I could predict a little better for you right

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now about that, but again, good news that has been officially signed. Great, and I just want to

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congratulate you and Jessica Olin-Nulin and the CAGRD staff on getting that approved and as much

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that made eminent sense and was necessary passing anything through the legislature and getting

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it accomplished is a huge, huge accomplishment.

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So congratulations, I'm speaking on behalf of the committee to say good job.

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Thank you, Madam Chair, and I do want to say thank you to all of the staff too that have

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helped out on this, both Ms. Cranionos, Mr. Seusuals staff and a number of other, our finance

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staff as well, on getting that bill ready to go and draft it. It was a lot of work,

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a lot of questions that we were coming back, and also Jessica really ran point with our team

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on that this year too, and she ran that bill through the process, testified for us for

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CAP.

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So that was really great to see that bill get through the process the way it did.

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So again, thank you for your comments, Madam Chair.

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So moving on, this will be the last bill.

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I'll provide a direct update on the ballots of these bills here in a moment.

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Just a status update, nothing new on the rest of these.

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But the substance of what I'll talk about here for the next couple of minutes is going to be

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back to urban legislation.

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And we do have some movement on that not in the form of bills within committee the whole,

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but there have been stakeholder meetings as of this week, updates on where that stands.

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So I'm going to provide you an update as well as some input that we provided the stakeholders

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in this process.

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So as you recall, there have been multiple iterations that we've looked at that we've analyzed

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to this past five plus months.

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We had the original rulemaking, the informal rulemaking, that DWR introduced, that was strictly

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at an acre foot per acre, provided just two member service areas, and so was limited in

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nature and scope as to the impact of the parties.

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Ultimately, the legislature introduced a bill, that ended up being a tiered kind of approach.

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So it had varying acre foot per acre, and there was percentage replenishment obligation within the bill.

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So it was, if you took a higher acre foot, you got a lower percentage offset and kind of went down.

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So, but again, the key there was that the percent that the GRD had to replenish for those bills was not 100% of the volume that was being pumped.

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And in those cases, there was, again, without directly calling it out, it seemed to be

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the looted to some kind of a groundwater allowance in there.

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So that bill, both made about it, made it out of committee.

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And that kind of kick started what has been the past, almost two or three months, as you've

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heard my reports, stakeholder meetings that the Senator has convened to continue to talk

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about this bill.

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And most recently, as of this past week, that the executive, so it's the same parties,

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legislature convened them now the executive convened a group.

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What we saw about two and a half weeks or so give or take was an amended proposal that

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came out of the Senate to put on the table and for folks to consider.

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What that did was have a single rate rather than this tiered kind of structure.

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It was two acre feet per acre, but it was a six year window.

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So it was a six year, it wasn't really called a pilot program, but it would require to be

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looked at within six years. It did apply to all member lands, as well as designations, eight

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hours providers, and so it was really kind of opened up. So we've mentioned these dials,

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these policy dials. We would really say all of these dials were somewhat turned up, but it was

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in a compressed timeframe. So the goal was to only have it done within six years, and then it

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would be re-looked at the legislature could decide to re-up it or not after that after that period.

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There was also some language in there about the plan of operation, as it relates to

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Aged Urban as well.

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So the goal there was that the plan of operation would not be impacted by any new Aged Urban

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Program in it, although it was a little interesting how the language was ultimately drafted,

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but that appeared to be the intent.

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But I think the big takeaway there was that the dials essentially were turned up to a large

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degree, although the time frame and the effect of the data of the legislation was meant to

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be compressed in nature.

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So I did leave some questions about would there be kind of a big run folks wanting to

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enroll into this program possibly get in under the deadline, what would that mean?

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So it was really hard I think to analyze but in large part it could have had still a pretty

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significant impact. But that proposal was out for about two or so weeks and there was an alternative

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proposal this past week that was put on the table. Now what is being discussed is an acre foot a

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So, those are the two numbers, so it's trying to turn the dials back to some degree about the impact.

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And also, make it consistent with the numbers that the parties have heard come out of the AMA's that they feel that could work, potentially.

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A couple of other highlights to this, too, is that what was rolled out and discussed would still be 100% consistent with the applicable management goal.

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So, again, one acre-foot breaker, one and a half feet for a Phoenix AMA, 100% consistent with

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the management goal, which means for the GRD, we are replenishing 100%, so that's an important

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feature.

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Member lands would also still be able to participate under this, but under a limited five-year

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window during which the credits may be applied to certificates of a short water supply after

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that they could not.

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So they're trying to limit the exposure of the member lands, even though they would be permitted

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under this idea.

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And there would be a 10 year Ag to Urban Program review as well.

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So again, I mentioned that the Senate proposal kind of turned them up, but again, had a shorter window.

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This one is starting to turn them back down, has a longer runway, but a shorter period for the member lands.

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So that's kind of where folks are at.

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A couple of things that we've recommended in this process that I do want to brief the committee on briefly as well.

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So now that we're starting to see a proposal somewhat solidify, again, I've walked you through

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kind of the history.

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The rulemaking, the initial Senate Bill, the Senate proposal, and then now the Executive

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Counter-Proposal to this, we're starting to see this solidify to a large degree, which helps

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us kind of understand what this, what we might need to help from a CAPGRD standpoint be able

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to administer a program like this.

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So a couple of things that we've recommended in one of them is one that we've talked through this committee you've heard me mention this in part of our original motion or position of the bill was continuing to obtain legislative support on the acquisition of potentially available supplies list of the plan of operation including clear path or on river acquisitions from willing sellers that's part of the plan of operation list of potential available supplies so that is one of them the other for that we've talked about include reconsideration of the replenishment reserve target

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So that's an item we believe that could be helpful in this discussion.

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Additionally, working with the state for G-R-D,

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that have access to state land, M&I, C-A-P, water.

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Thirdly, I'm going to assume you,

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fourthly, applying D-W-R's drought exemption to the G-R-D.

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And then lastly, the expanding G-R-D's access to the ground water

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transportation base in the specifically McMullan and Butler.

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You know, we already have that ability to understand

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for Harkwala, so this would be trying to get some clarification that those basins could also be utilized.

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So these items are what we've asked to be considered during these discussions.

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So there are obviously a large legislative package that is being discussed and for us to be

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able to administer that, we've asked for a consideration of some of these items as well to assist

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with the GRD administration on the back end from a supply standpoint and simply from a

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So with that, Madam Chair, I'm happy to answer any questions, but that's kind of the current status of this.

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We're somewhat of an holding pattern again.

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All parties have received some of the input from the most recent proposal that's been put out there.

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And then have asked to kind of go back to our organizations and look at this, kind of understand the impact and provide some official feedback.

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But that's kind of where we stand as of right now and again the input that we provided throughout these negotiations and this stakeholder process.

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So I'll stop there, Madam Chair, and see if there's any questions you or committee members might have.

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Great, thank you very much. Any question, Board Member Fisher?

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Oh, and before you to go, I would do would like to announce that Board Member Jacobs has joined us virtually as of about 1239.

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So welcome, Pat. We see you.

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Mr. Gray, just quick question for you that.

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So the act urban is kind of a big deal.

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How much is the legislature coordinating their activities with the Arizona Department of Water Resources, which is holding meetings on a monthly basis?

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And the reason I asked that, I watched just a couple days ago, the January meeting, and I think earlier today I was watching the March meeting, and it seems to me that there's still getting a lot of questions from bland owners, and some other pretty basic and pretty substantial.

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I'm much of the working together or is that a different off-track.

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Thank you, Madam Chair, former Fisher.

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They're directly involved.

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So the parties that are involved include, again, some of the major development interests.

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Obviously, GRD, you have municipal providers, governor's office, DWR.

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So they're all part of these discussions.

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So DWR is there.

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So when we talk about a state proposal back, that included DWR's input and analysis.

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us into all of that. So yeah, when I see the state, that includes both the governor's office

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and DWR under that, under that term.

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Thank you.

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Board members, Diego.

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Yeah, I just want to know.

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And maybe I'm missed it.

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But when is the last date they can actually do something with, are you saying that when they go

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totally out of session, then it's done if they haven't passed it out of the full legislature?

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The deadline to pass legislation is there really isn't a date, so it's basically when the

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legislature decides to be done for the year.

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The only real deadline they have is to pass a budget, and that's June 30 at the midnight.

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And even then, technically, if they don't pass it, you have a government shutdown, which we've

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seen at federal government side, we haven't seen really that at the state level.

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At least during my career we have it, but I know there's been some instances early on before

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time with that, but there really isn't a time frame that stops the

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legislature from continuing to pass legislation. Now, once they do decide

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they're done for the year and they make the motion for signi die to be

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wrapped up. If whatever is not passed at that point is effectively dead,

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so you've kind of heard my comments during the year as Bill says, Bill's die,

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nothing's dead until signi die. That's kind of the old saying. So, which is why

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these bills continue to be alive. They're both sitting in the house in the Senate. They could

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still move to the floor and be swapped and sent to the governor. That would be the parliamentary

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process to make that work. So these are all still alive and well and could be moved to the process.

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And tell them what essentially are actually adjourned and signed for the year. These still remain alive

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and could be in consideration. And is that because they've already been approved in both committees

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house in the Senate and so they're kind of just waiting to go to the floor.

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Madam chair that correct now had there not been two bills

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They would be effectively dead without some special permission

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So because there are two identical bills on either side. That's how it works. So one side would pass a bill sent it to the other body

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They would swap that bill on the floor and then that's what

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They would vote on. So that's the parliamentary process to make a bill. To pass legislation, what's the deadlines of it for committees? That's one way around that deadline. But again, both bills have had official hearings in both the House and the Senate since their deduction, but they were under separate bills. So that's yours.

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Great. Thank you. Any other questions? If not, do you have still some more to go over, right?

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Madam Chair, again, this was just an update on the status of these of these bills. These have not really moved since the last time we've updated the committee.

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So, this was just rather than having seven different slides after this, we compress these all into a single slide.

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So, you can see the updated status of each of these again.

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They haven't really moved much since we've, since we've updated.

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The only one I would point out is the last Senate Bill 1393, the groundwater replenishment,

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Penal AMA Bill was passed out of the house and was transmitted back to the Senate for a final vote.

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So that is one that could be sent up to the governor here, potentially fairly, fairly soon, but other than that, the balance of these bills have largely not moved.

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Great, thank you very much. Any final questions for Mr. Gray?

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If not, thank you, and maybe we'll see what happens at our next meeting.

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I'm sure I think we will have hopefully a more substantive update on the status and potential

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movement on the agger of an issue, I think, by then given where things are going, it seems

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to be certainly speeding up the conversations are, so we probably will have a more substantive

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update certainly by the time we update you next.

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I think we'll expect that. Great. Thank you so much. The next item on our agenda is,

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there is no report, so it's a placeholder we've kept to have a report on ADWR's informal rule-making

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process on the act of urban, but Mr. Gray just kind of rolled everything up into his report.

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So we will not have a report from Laura on that item, but we will have a report from Laura

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Gagnano, CAGRD manager on item 4, which is the report on modifications to the CAGRD 2025 plan

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of operations. So welcome, Ms. Grignano.

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Good afternoon, Madam Chair and can we any members for the record, Laura Grignano, CAGRD manager?

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And I wanted to give the committee an update today on the plan of operation review process.

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You'll remember back in March, I gave a report to the committee on the status of our plan of operation.

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I walked through the steps in statute of the plan approval.

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And ADWR, just as a reminder, has 60 days after we submitted the plan to determine whether we had submitted sufficient information for the director to make his determination on consistency with management goals for the 3AA Mays.

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We did receive a letter on February 28th of requesting additional information and modification of the plan.

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I reviewed this with the committee in March and I'll just summarize that again for you.

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Today, I'm bringing back the modifications that staff have made,

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pursuant to or based on these requests from the department, and we will be submitting the modified plan and additional information to the department,

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most likely within the next few weeks.

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So again, ADWR requested in the letter that we remove all NIA priority CAP water from our analysis as a source of supply to meet our obligations as well as to calculate the replenishment reserve target.

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And the department had made that request based on the future uncertainty and availability of that supply.

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Also, the department asked the GRD to either adjust the plans so that it does not rely on the replenishment reserve in the 20 year period or justified doing so.

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And I believe that I reported to our committee that we had not used or shown the use of replenishment reserve in the plan,

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but we did realize that there may have been some confusion on the use of what we call CAWCD dedicated credits.

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And so we made sure that we clarified that in the modified plan, and I'll walk through and show you those clarifications.

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We also were asked, again, to provide underlying data used to create certain charts and tables in chapter 3.

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That is the chapter that looks at the projected obligation estimates.

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And then finally, the department put CGRD.

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the unnoticed that it may require the plan to be revised at a later date to include any

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ag to urban impacts on GRD if a program was finalized and you just heard from Mr. Gray, the work

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that's going into possibly legislation that would enable ag to urban to begin. And so we are still

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really on on notice even once we submit this modified plan next week or the week after that

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we could have to modify it one more time.

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So I will keep the committee up to date on that last request and again they gave us 90 days

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for the additional information and that takes us out to May 28th so two weeks essentially

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from now that is due.

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So just in summary, here are the modifications made to the plan.

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I will walk through most of these in detail in the next few slides.

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But we did make a number of adjustments to tables in chapters 4 and 5.

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All those an associated text all having to do with taking out the NIA CAP priority from our analysis.

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We also revised Figure 4.2, removing the use of dedicated credits to meet the projected

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replenishment obligations in the Phoenix AMA.

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I think this was the chart that may have caused some of the confusion and appearance that we

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were using credits that should be used or should be used for the replenishment reserve.

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Table 5 has also been revised to show projected use of these dedicated credits again just to clarify

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what we're using projecting to use those for in the future.

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And then we also included some completed map legend and a few figures in chapter 3.

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And then we adjusted all of the long-term storage credit balances as of year and 2023.

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We had in some sections we tried to estimate the long-term storage credits as of the end of 2024,

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but because the official counting has not yet been supplied from the department, we decided to keep everything at the 2023

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balances, so that might be easier for the department to check those balances based on their records.

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So moving into some of these changes, I'll start with removing the NIA priority water from our analysis as a source of supply.

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I'm going to show you a series of tables and figures. I'll show you what was submitted, so this is table 4.1 that was submitted.

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This is the table that shows our current CIGRD annual water supply portfolio, and you'll note that this first lines show an NIA priority water.

242
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So CAP and IA water, the White Mountain Apache lease, are the reallocated CAP and IA water as well as the cap and A that we lease from GRICS.

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we modified that table. This is the new revised table that we will be submitting in the modified plan.

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You can see that we still kept those supplies in this table because we do have the legal rights to all of these supplies,

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but we did rate them out. We also show a total water supply annualized water supply at the bottom.

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00:23:48,260 --> 00:23:54,980
that does not include those first three lines of NIA water. So you can see there's a

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great out a sum of just over 77,000 acre feet. That's great out because that includes

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NIA, the 38,000 does not include any NIA supplies. We also thought for clarity purposes

249
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is that we would split the long-term storage credit balance number.

250
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We had that annualized at 14,000 acre feed, that's the 1.4 million acre feed of long-term

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storage credits annualized over 100 years.

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We thought it would be helpful to show the three accounts that those credits are in because

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they can be used for, and should be used for different purposes, especially the replenishment

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reserve credits. And again, this is to make sure there isn't any confusion in the plan

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when we're referring to certain credit balances that it's just clear which balances we're

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talking about. And we do then further divide those accounts by AMA.

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The next table, table 4.3,

258
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potentially available water supplies. Again, this is the submitted table. And I'd like to call

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attention to the line that is the CAP project water.

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That here is approximately

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potentially available high level you want to see it at just over 400,000

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00:25:29,360 --> 00:25:34,900
acre feet. I'm pointing to that number so that when I go to this revised

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table. You can see that all of the NIA supplies were removed from the potentially available

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water supplies in that category. That had the effect of essentially dropping those numbers

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in the high category down by about 200k and in the potentially low scenario by about 100,000.

266
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And you can see then it has a corresponding decrease in the total column.

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Moving on to table

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5.2, the replenishment reserved target by AMA. Again, this is what was submitted, and I'd

269
00:26:13,490 --> 00:26:20,070
like to call your attention down to the last line, which is the target. And for the Phoenix AMA,

270
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you can see that it's just over 622,000 acre feet with a total of the 3 AMA's at 850,000

271
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or feet.

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00:26:35,740 --> 00:26:41,480
The revised table, the total replenishment reserve target now for all three

273
00:26:41,480 --> 00:26:50,720
amays is just under 1 million acre feet with the Phoenix AMA increasing by about 150,000

274
00:26:50,720 --> 00:26:57,940
acre feet. And this is a result of removing the assumption that our NIA supplies would

275
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be available approximately 30% of the time, so maybe 30 years out of the 100 year period through

276
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that calculation, we were asked to remove that totally.

277
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So you can see that that did have a significant impact on raising the replenishment reserve

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target.

279
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And I will add that if we do need to modify this plan again to include Ag to Urban Impacts, you'll

280
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see this number increase even more, because it is based on our total obligation over 100 years,

281
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then looks at our supplies that we have available to meet that obligation and then multiplies

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up by 20.

283
00:27:39,480 --> 00:27:45,160
So this will likely surpass the million mark for total replenishment reserve target.

284
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So going back to the letter, the second request was adjust the plan, so we're not relying

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on the replenishment reserve.

286
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Again, I just want to note that we did not show no replenishment reserve credits were used in the initial submission of the plan.

287
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But we did identify some areas where we could see there could be some confusion thinking that we might have been using dedicated credits both for obligation and replenishment reserve.

288
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So I'll show you how we tried to mitigate any confusion.

289
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So, in figure 4.2, this is our CHERD water supply utilization.

290
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This is looking at just the Phoenix AMA, so the orange line is our expected replenishment

291
00:28:32,800 --> 00:28:37,400
obligation in the Phoenix AMA through the projected 20-year period.

292
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And then the supplies that we would use to meet those obligations.

293
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And in this initial submission, we did eliminate all of our NIA supplies.

294
00:28:50,420 --> 00:29:03,440
And so the top purple colored line here is illustrating the use potential use of CAWC dedicated credits.

295
00:29:04,160 --> 00:29:06,800
And these are credits that through policy.

296
00:29:06,800 --> 00:29:16,180
the board has dedicated to CEDGRD for either to meet its obligation or to build and maintain

297
00:29:16,180 --> 00:29:17,420
the replenishment reserve.

298
00:29:18,140 --> 00:29:22,140
So I think because we can use those to build and maintain the replenishment reserve,

299
00:29:22,480 --> 00:29:27,520
there was some confusion when we get to that next chapter on replenishment reserve that

300
00:29:27,520 --> 00:29:30,220
we were using these in both ways.

301
00:29:30,220 --> 00:29:41,380
And so we revised this chart and we have the number of long-term storage credits and, again, I showed you, there's three different accounts.

302
00:29:42,240 --> 00:29:51,220
We have enough long-term storage credits in the account in the long-term storage account to show we still meet this obligation in the 20-year period.

303
00:29:51,220 --> 00:29:59,960
And we've left those dedicated credits that purple bar off of this chart, and you'll see in the replenishment reserve table in a few slides that we should.

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00:30:00,000 --> 00:30:13,240
Those being used to build and maintain the reserve. Think that a department just wanted to make sure we were able to have the credits, enough credits in these accounts to both meet obligation and also to build the reserve.

305
00:30:17,430 --> 00:30:23,590
Again, now this is the table that shows the summary of projected replenishment reserve credits available to the department.

306
00:30:23,590 --> 00:30:29,510
And we made some changes to just the titles here of the actual columns.

307
00:30:30,230 --> 00:30:37,370
Again, and here is where we cite that the CECWCD board amended its policy.

308
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Inside all policy regarding the dedication of CWCDs, existing long-term storage credits to GRD.

309
00:30:44,290 --> 00:30:58,270
Dedicating all unencumbered credits currently held by CWCD for the exclusive use by CAG-RD to meet its legal requirements towards replenishment obligation and or establish and or maintain the reserve.

310
00:31:00,480 --> 00:31:02,700
So this is now the revised chart.

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00:31:03,980 --> 00:31:10,140
There are a lot more words in the titles of the columns but again it's just to make sure that there isn't any confusion.

312
00:31:10,140 --> 00:31:19,200
And we essentially show the number of C-A-W-C-D dedicated credits, but we also say, okay,

313
00:31:19,360 --> 00:31:25,680
we have in the Phoenix AMA, we have approximately 188,000 acre feet of credits.

314
00:31:26,380 --> 00:31:34,880
For this planning purpose, we are showing that we would be using those credits to build the replenishment reserve.

315
00:31:34,880 --> 00:31:45,480
You can see this is the current balance, and this is what the projected balance could be just based on the availability of credits already in CWCD's possession.

316
00:31:46,680 --> 00:31:52,520
For the Penale AMA, we do use some of these CWCD credits to meet obligation.

317
00:31:52,520 --> 00:31:58,640
And so we just projected out the 20-year obligation, that's the 55,000-acre feed of credits.

318
00:31:58,900 --> 00:32:06,520
So we're saying we would use that amount to meet obligation and we'd still have over 255,

319
00:32:07,200 --> 00:32:10,000
how's an acre feed of dedicated credits in Penalty?

320
00:32:10,140 --> 00:32:10,780
I mean, it's reserved.

321
00:32:15,250 --> 00:32:24,370
So next steps, we plan to submit the revised or modified plan to the department,

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00:32:24,370 --> 00:32:36,170
along with the additional information that they requested, and, like I said, we will do so by no later than May 29th or by May 28th.

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00:32:36,570 --> 00:32:48,230
And we will continue to monitor act to urban legislation and its potential impacts on our obligations and whether or not we will need to modify the plan one more time.

324
00:32:48,230 --> 00:32:50,130
but they always see three times the charm.

325
00:32:51,710 --> 00:32:54,150
So, but with that, I'm happy to take any questions.

326
00:32:54,750 --> 00:32:55,410
Great, Ms. Greenal.

327
00:32:55,490 --> 00:32:56,190
Thank you very much.

328
00:32:56,330 --> 00:33:00,590
Questions from the committee, questions from committee member online?

329
00:33:01,730 --> 00:33:04,510
No, but thank you for walking us through the revisions

330
00:33:04,510 --> 00:33:09,670
and the steps and just know sometimes when you get through these processes

331
00:33:09,670 --> 00:33:12,470
of responding to comments and things.

332
00:33:12,730 --> 00:33:15,070
Ultimately, the documents better, the documents clearer,

333
00:33:15,070 --> 00:33:21,630
the documents stronger and so you know I think that you guys have done a great job of taking

334
00:33:21,630 --> 00:33:26,910
the comments figuring out what you know what they mean and translating that into a revised

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00:33:26,910 --> 00:33:35,950
document. So we'll look forward to seeing the next steps. I will add that the revised plan will

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00:33:35,950 --> 00:33:42,190
be posted on our website when we submit it to the department. Great. Before you leave, I now see

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00:33:42,190 --> 00:33:45,510
at Board Member Jacob has his hand up, so I'll recognize him.

338
00:33:46,910 --> 00:33:48,110
Thank you very much.

339
00:33:49,810 --> 00:33:54,690
Last, I think it's the last one, age 16, able 5.5.

340
00:34:01,010 --> 00:34:05,910
So I can explain to people last week, what is 0, 0 mean for the two-time name,

341
00:34:06,270 --> 00:34:15,390
a garden, a dedicated credits, and what does it mean in terms of the long-term repunitment?

342
00:34:16,310 --> 00:34:16,590
Yes.

343
00:34:16,590 --> 00:34:19,230
Thank you, Madam Chair, Director Jacobs.

344
00:34:19,990 --> 00:34:32,530
So yes, the zero zero just means that there are no longer any CWCD dedicated credits left in the balance for the Tucson AMA.

345
00:34:32,870 --> 00:34:33,890
Those have been used.

346
00:34:34,410 --> 00:34:42,350
However, we do have currently we have the 42,000 acre feet in the replenishment reserve already.

347
00:34:42,350 --> 00:34:52,090
I, for context, the average annual replenishment in Tucson is approximately 3,900

348
00:34:52,090 --> 00:34:52,830
acre feet.

349
00:34:53,030 --> 00:34:58,410
So that's well over 10 years of replenishment obligation already in the replenishment

350
00:34:58,410 --> 00:34:58,950
reserve.

351
00:34:59,610 --> 00:35:09,550
And we have a footnote on the last column in the Tucson AMA under the 40, 2000.

352
00:35:09,550 --> 00:35:18,290
And that is also that footnote indicates that we have multi-year long-term storage credit deals

353
00:35:18,290 --> 00:35:25,010
with Tucson water and metro that we are continuing to acquire supplies or long-term storage

354
00:35:25,010 --> 00:35:25,970
credits with.

355
00:35:26,510 --> 00:35:31,730
And those are also credits that, you know, can be used in the Tucson AMA to build that reserve.

356
00:35:31,730 --> 00:35:40,830
So, although there's a zero balance in the CAWC, CAWCD dedicated balances, we do have other

357
00:35:40,830 --> 00:35:47,570
sources of credits to continue to build and maintain the Tucson replenishment reserve account.

358
00:35:51,540 --> 00:35:57,980
I guess, I guess, but there was a 20 year obligation, and there's 100 year obligation.

359
00:35:58,460 --> 00:35:59,280
That's not correct.

360
00:36:00,300 --> 00:36:02,260
20 year review, I guess.

361
00:36:02,260 --> 00:36:23,320
Correct. We are required to show that we have the supplies planned, planned supplies to meet the 20 year replenishment obligation for our current members and the potentially available to meet new members in that 20 year and then potentially available for current and new out 100 years.

362
00:36:23,720 --> 00:36:30,420
The replenishment reserve target does use the 100 year obligation for the calculation.

363
00:36:30,420 --> 00:36:35,360
And these tables for the hundred years and there's another table for the twenty years.

364
00:36:35,760 --> 00:36:36,900
What we're saying?

365
00:36:38,040 --> 00:36:41,000
I just don't know.

366
00:36:42,040 --> 00:36:42,280
Yes.

367
00:36:42,900 --> 00:36:43,180
Yes.

368
00:36:43,740 --> 00:36:54,380
This is just an example of the current replenishment reserve balances and the dedicated credits that could be added to that account.

369
00:36:55,540 --> 00:37:03,180
But this is not really looking at the 20 or the 100 year period.

370
00:37:04,860 --> 00:37:07,460
So, so this doesn't speak to those issues.

371
00:37:09,720 --> 00:37:12,980
Did some of the other points, did there other other

372
00:37:16,940 --> 00:37:19,940
charts that do?

373
00:37:21,020 --> 00:37:24,220
Madam Chair, board member, Jacob, I'm sorry.

374
00:37:24,560 --> 00:37:26,320
I'm not sure I understand your question.

375
00:37:27,540 --> 00:37:36,820
Well, if I want to know what the review says and what the hundred years says, is there another one of these charts that I just missed?

376
00:37:38,080 --> 00:37:53,280
Yes. In chapter three, there are tables with numbers for the twenty years for projected obligation for all three AMAs.

377
00:37:53,280 --> 00:38:00,240
and then also in in chapter five in the replenishment reserve chapter you could see the

378
00:38:00,240 --> 00:38:06,440
100 year projected obligation for each AMA that is part of the calculation for the replenishment

379
00:38:06,440 --> 00:38:11,740
reserve target. So, and I'm happy to point you to those numbers.

380
00:38:13,040 --> 00:38:19,100
Yeah, it would be very helpful. I'll try to find them, but can you solve a helping yet?

381
00:38:19,100 --> 00:38:27,000
Okay. No problem. Yeah. Thank you, Board Member Jacob. I think especially just keep in mind that what

382
00:38:27,000 --> 00:38:33,020
what we've been reviewing here are the things that change specifically based on the comments from

383
00:38:33,020 --> 00:38:39,940
DWR and there's still a lot more content in that report like you just you know asked. So

384
00:38:39,940 --> 00:38:45,360
you know we know from just going through the whole process probably if you have that question it's in

385
00:38:45,360 --> 00:38:50,760
somewhere and Laura's encyclopedia, encyclopedic knowledge of that report can

386
00:38:50,760 --> 00:38:55,340
point you to it. So, great. All right, thank you. Any other questions?

387
00:38:56,520 --> 00:39:03,520
All right, then thank you very much. We're going to move on now to item five, and that is

388
00:39:03,520 --> 00:39:08,380
discussion and consideration of action to recommend that the board authorized the collection of

389
00:39:08,380 --> 00:39:17,020
GRD annual membership dues during tax year 2025-26 and adopt the CHRD rate schedule for

390
00:39:17,020 --> 00:39:28,020
2025-26 through 2020-29-2030 and we have our finance manager Doug Dunlap to give us a report

391
00:39:28,020 --> 00:39:30,220
out on this. Welcome.

392
00:39:31,460 --> 00:39:35,340
Thank you, Madam Chair. Members of the committee, Doug Dunlap, funny it's an accounting manager.

393
00:39:35,340 --> 00:39:36,400
So

394
00:39:38,740 --> 00:39:50,100
last month, we kind of walked through the C.A.Jardy bucket chart, which is basically the revenue stream of money's coming in for the C.A.Jardy, and then how that funds are used.

395
00:39:50,980 --> 00:40:00,040
So this focus is really on that left side of the charts, all the rates on the fees, the rates and the membership dues.

396
00:40:02,540 --> 00:40:07,880
I wanted to go through just a few of the assumptions for the rates.

397
00:40:09,280 --> 00:40:14,260
So rates are based on the CO2BCD rates at 1825,000 acre feet.

398
00:40:14,600 --> 00:40:20,600
This two specific rates for CAJ that have that direct relationship with CO2BCD.

399
00:40:20,880 --> 00:40:22,280
So water replenishment.

400
00:40:23,160 --> 00:40:27,580
So the funds that are collected to meet the obligations.

401
00:40:28,300 --> 00:40:29,540
And then the replenishment reserve.

402
00:40:29,540 --> 00:40:34,220
both of those are water related, so they're related to the CWCD rates.

403
00:40:35,400 --> 00:40:40,760
We have for the advisory years included in, if CWCD goes to different volumes,

404
00:40:41,040 --> 00:40:44,060
the 600,000 to up to a million acre feet.

405
00:40:44,260 --> 00:40:50,320
We should kind of what those two rates would do at those various water volumes.

406
00:40:51,640 --> 00:40:55,380
Another item, the rates that I'll be showing,

407
00:40:55,380 --> 00:41:02,080
I do a some collection of the annual membership dues at 100% of the allowable amount by statute.

408
00:41:03,780 --> 00:41:10,200
The next item you'll see, at least on the screen, I lined out.

409
00:41:11,560 --> 00:41:20,340
Before the AMD legislation was signed, we had posted TPD on all of those advisory years.

410
00:41:20,340 --> 00:41:27,200
it does not apply to the 2526. It's all the advisory years. Once that legislation was signed,

411
00:41:27,400 --> 00:41:33,680
we kind of made a quick update so that we always try and provide that information out there for

412
00:41:33,680 --> 00:41:39,760
planning purposes for all of our customers. And so we updated those. Again, that's all the advisory

413
00:41:39,760 --> 00:41:46,740
rates. They're posted on the website now as well as in this presentation. So that line did come out.

414
00:41:46,740 --> 00:41:50,480
We were able to post them, so we're glad to see that legislation signed.

415
00:41:53,040 --> 00:41:58,520
We will continue to meet the replenishment requirements that you're following the

416
00:41:58,520 --> 00:41:59,900
obligation is created.

417
00:42:00,780 --> 00:42:08,620
That kind of how fast you meet that obligation impacts what the water replenishment rate

418
00:42:08,620 --> 00:42:09,320
would be.

419
00:42:09,320 --> 00:42:18,560
If you delay it, like CJD has three years to meet that obligation, but further you go

420
00:42:18,560 --> 00:42:22,220
out, each year water rates are going up, so it costs more.

421
00:42:22,840 --> 00:42:28,900
So CJD has been taken the stance to do it in the next year to basically be the most

422
00:42:28,900 --> 00:42:33,920
financially efficient and nothing.

423
00:42:33,920 --> 00:42:47,000
And then lastly we will continue progressing toward replenishment reserve target at one third of the replenishment obligation when working to move toward that target.

424
00:42:47,040 --> 00:42:54,880
We look at what the obligation is and then add about a third of that amount to the replenishment reserve.

425
00:42:56,140 --> 00:43:01,640
That's how we show the continuing to make that progress.

426
00:43:04,100 --> 00:43:09,800
excuse me. It's kind of getting into, so how did the rates come out compared to the

427
00:43:09,800 --> 00:43:16,220
visor rates? So for the administrative rate, consistent as what was on the advisory,

428
00:43:16,740 --> 00:43:23,040
so no change on any of those. Water replenishment rates, the current year, 2526 does

429
00:43:23,040 --> 00:43:30,560
not change because by replenishment in that next year, we have actually already replenished

430
00:43:30,560 --> 00:43:40,560
What was I will have finished by this year, so there's no impact on the current rates the advisory rates will go up based on the C2B CD rates that are changing

431
00:43:43,080 --> 00:43:46,240
Basically the same rationale for their placement reserve

432
00:43:48,000 --> 00:43:55,000
We'll have done that out of this year's dollars so the 2526 does not change it will only the advisory rates went up

433
00:43:56,260 --> 00:44:00,220
And that's because of the volume changes if it starts on water rates

434
00:44:00,560 --> 00:44:09,740
rate, not changed from what either the provisional or the advisory, so not seen any changes in that.

435
00:44:10,720 --> 00:44:18,680
On the 2526 annual membership dues, you will see that those rates went up a little bit from what the advisory were.

436
00:44:19,100 --> 00:44:23,520
If you remember that methodology is you figure out what your collections on everything else,

437
00:44:23,520 --> 00:44:27,760
basically from your fees, enrollment and activation fees,

438
00:44:28,540 --> 00:44:31,160
and then what are you collecting from your rates?

439
00:44:32,040 --> 00:44:33,460
Basically, what are your obligations?

440
00:44:33,880 --> 00:44:36,540
Sometimes the infrastructure and water rights rate.

441
00:44:37,300 --> 00:44:39,080
Figure out what that total collection is,

442
00:44:39,280 --> 00:44:42,660
and then the total AMD collection

443
00:44:42,660 --> 00:44:46,960
can't be more than 25% of that total after collection.

444
00:44:48,200 --> 00:44:51,080
So, those mainly the obligations have gone up a bit

445
00:44:51,080 --> 00:44:58,360
and so that total bucket's gone up a little bit, so that's kind of the what's driving

446
00:44:58,360 --> 00:44:59,180
those increases.

447
00:45:03,820 --> 00:45:17,820
And I kind of already mentioned this one. The advisory rates, we have one head and updated that based on the new language that was recently signed.

448
00:45:24,650 --> 00:45:38,290
And a lot of numbers on this. So here's the CIGERD rates side. As I said, there's no changes on the 2526. The only numbers that would have changed would be these advisory years for the water replenishment.

449
00:45:38,290 --> 00:45:42,030
and the replenishment reserve the rest of the rates are consistent.

450
00:45:47,240 --> 00:45:50,640
As far as C.A.J.R.D. fees, that would be the enrollment

451
00:45:50,640 --> 00:45:57,000
and activation fees, no changes on any of those, consistent with what they were on the

452
00:45:57,000 --> 00:46:02,200
provisional, as well as no change in any of the advisory. Those are basically

453
00:46:02,200 --> 00:46:07,660
they're increasing about 5% a year. That was based on some earlier discussions and

454
00:46:08,660 --> 00:46:10,520
concurrence on those rates.

455
00:46:12,900 --> 00:46:19,000
AMD's, as I said, these are going up the 2526 are going up a

456
00:46:19,000 --> 00:46:23,820
little bit, I'll show those on the next slide, and then all of these rates out here are

457
00:46:23,820 --> 00:46:24,900
under the new legislation.

458
00:46:30,320 --> 00:46:42,000
Just zeroing a little bit on the current year, you can see what the

459
00:46:43,220 --> 00:46:50,160
roughly, you know, from $1.36 to $2.00 a lot on the, for member lands, and then the

460
00:46:50,160 --> 00:46:54,460
member service area does go up about $1.07.00.

461
00:46:58,270 --> 00:47:02,010
And if a lot of information at once, but I'd be happy to answer any questions.

462
00:47:03,090 --> 00:47:03,230
Great.

463
00:47:03,370 --> 00:47:04,250
Thank you, Mr. Dunlap.

464
00:47:04,350 --> 00:47:05,970
Any questions, part of member Fisher?

465
00:47:07,970 --> 00:47:08,530
Mr. Dunlap.

466
00:47:10,800 --> 00:47:18,020
So, the rates are based on the delivery of 825,000 acre feet of water, but I think this

467
00:47:18,020 --> 00:47:24,040
morning we were talking about during the finance water park may, you know, we actually delivered

468
00:47:24,040 --> 00:47:26,580
about 60,000 acre feet more than that.

469
00:47:26,880 --> 00:47:31,360
Does that change anything in the rates or how do you figure that in?

470
00:47:32,060 --> 00:47:36,880
So, on the CO2BCD side, those rates get reconciled.

471
00:47:36,880 --> 00:47:44,220
C.A.Jurdy for its C.A.P. contract will get that benefit of that reconciliation.

472
00:47:45,220 --> 00:47:49,080
However, the rates at C.A.Jurdy charges its customers.

473
00:47:49,520 --> 00:47:52,180
They go into effect the Monday after the board meeting.

474
00:47:52,920 --> 00:47:58,900
And then they, for member lands, get calculated, get onto the property tax, move forward,

475
00:47:59,160 --> 00:48:02,920
and the rest of the member service area, build that fall.

476
00:48:04,460 --> 00:48:14,600
So, any difference in what CGPAD versus what we estimated affects the future rates.

477
00:48:14,980 --> 00:48:18,700
So we don't reconcile the current rates that basically goes in and adjust the future.

478
00:48:20,940 --> 00:48:21,020
Great.

479
00:48:21,140 --> 00:48:21,540
Thank you.

480
00:48:21,580 --> 00:48:22,440
Any other questions?

481
00:48:25,940 --> 00:48:26,560
Or remember Miller?

482
00:48:28,020 --> 00:48:28,860
I don't have any questions.

483
00:48:29,460 --> 00:48:30,280
I'll entertain a motion.

484
00:48:30,600 --> 00:48:30,840
If you'd like?

485
00:48:30,940 --> 00:48:31,660
That'd be great.

486
00:48:31,960 --> 00:48:34,500
Let me just check with Board Member Jacobs online.

487
00:48:34,560 --> 00:48:35,320
Are you with good?

488
00:48:37,660 --> 00:48:39,620
Yeah, go ahead, please make a motion.

489
00:48:40,900 --> 00:48:48,260
I move that the CAERD and the Underground Storage Committee recommend that the Board of Directors

490
00:48:48,260 --> 00:48:57,220
authorize the collection of the CAERD annual membership dues during the tax year 2526 and

491
00:48:57,220 --> 00:49:01,720
approved the C-A-G-R-D rate schedule for

492
00:49:01,720 --> 00:49:08,080
2,025,026 through 2,029,030.

493
00:49:09,280 --> 00:49:09,380
Thank you.

494
00:49:09,440 --> 00:49:09,900
To have a second.

495
00:49:10,740 --> 00:49:11,340
We have a motion.

496
00:49:11,460 --> 00:49:11,920
And a second.

497
00:49:12,220 --> 00:49:13,920
Any further discussion on the motion?

498
00:49:15,160 --> 00:49:15,640
Seeing none.

499
00:49:15,780 --> 00:49:16,260
All in favor.

500
00:49:16,680 --> 00:49:17,360
Please say aye.

501
00:49:18,180 --> 00:49:18,220
Aye.

502
00:49:18,660 --> 00:49:18,760
Aye.

503
00:49:19,160 --> 00:49:19,840
Any opposed?

504
00:49:20,920 --> 00:49:22,020
Let the motion reflect.

505
00:49:22,320 --> 00:49:23,060
All members present.

506
00:49:23,200 --> 00:49:24,860
And online voted in favor of the motion.

507
00:49:25,360 --> 00:49:26,060
Thank you very much.

508
00:49:26,300 --> 00:49:26,680
Thank you.

509
00:49:26,680 --> 00:49:38,680
And Mr. Delavs is going to stay up here for the next item, which is the discussion and consideration of action to recommend that the board adopt an underground water storage rate schedule for 2026-202030.

510
00:49:41,940 --> 00:49:55,980
Thank you, Manager. Again, Dr. Delavs finds it's an accounting manager. So one of the other items under this committee is the underground storage. So we're going to turn to that side of the house for a minute.

511
00:49:55,980 --> 00:50:04,060
They see the underground storage rates actually show up on the C-A-W-C-D sheet.

512
00:50:05,220 --> 00:50:06,940
So it's kind of a bottom section of that sheet.

513
00:50:06,960 --> 00:50:09,680
Just want to mention that there's kind of two different rate schedules.

514
00:50:12,560 --> 00:50:17,920
The rates that are being recommended here are consistent with what we've been forecasting

515
00:50:17,920 --> 00:50:20,920
not just last year, but for several years.

516
00:50:20,920 --> 00:50:28,920
The pretty consistent, the underground storage has build up a reserve, recognizing that in some years they'll be more.

517
00:50:30,140 --> 00:50:32,800
Water going into storage in some years or less.

518
00:50:33,560 --> 00:50:38,380
However, kind of the maintenance activities are fairly consistent.

519
00:50:38,860 --> 00:50:44,380
So we've build up about a $8 million reserve that's where our target has been.

520
00:50:44,380 --> 00:50:53,680
So we're at that target and so we're holding our recommended rates at $15 for each of the

521
00:50:53,680 --> 00:51:00,660
AMAs and then to mention on the capital charges for underground storage, the only entities

522
00:51:00,660 --> 00:51:06,740
that pay that would be any federal customers any if we'd have any out of the three county

523
00:51:06,740 --> 00:51:07,280
areas.

524
00:51:07,280 --> 00:51:14,180
Any of our M&I customers, the water bank, the CHRD, none of them pay that capital charge.

525
00:51:14,500 --> 00:51:16,300
So very few actually pay that.

526
00:51:16,300 --> 00:51:17,900
Just want to mention that.

527
00:51:18,700 --> 00:51:20,540
And with that, I'd be happy to answer any questions.

528
00:51:21,420 --> 00:51:21,680
Great.

529
00:51:21,820 --> 00:51:22,520
Thank you so much.

530
00:51:22,600 --> 00:51:23,780
Any questions on this item?

531
00:51:24,400 --> 00:51:26,920
If not, I will recognize Board Member Miller for a motion.

532
00:51:29,130 --> 00:51:29,910
Thank you, Madam Chair.

533
00:51:31,530 --> 00:51:38,150
I move that the GRD and Underground Storage Committee recommend that the Board of Directors adopt the

534
00:51:38,150 --> 00:51:45,370
underground water storage, O&M, and underground water storage, capital charges rate, schedule

535
00:51:45,370 --> 00:51:48,370
for 26 through 2030.

536
00:51:48,730 --> 00:51:48,950
Thank you.

537
00:51:49,010 --> 00:51:49,950
Do I have a second?

538
00:51:51,130 --> 00:51:54,170
We have a motion and Board Member Fisher has seconded.

539
00:51:54,390 --> 00:51:59,230
If there is any further discussion on the motion, hearing none, all in favor of the motion,

540
00:51:59,470 --> 00:52:00,230
please say aye.

541
00:52:00,830 --> 00:52:01,250
Aye.

542
00:52:02,090 --> 00:52:02,770
Any opposed?

543
00:52:03,830 --> 00:52:08,030
Okay, let the record reflect that all members present in person and online voted in

544
00:52:08,030 --> 00:52:10,050
for the motion. Thank you very much.

545
00:52:10,330 --> 00:52:11,030
Thank you.

546
00:52:14,660 --> 00:52:20,060
Next item on our agenda is discussion and consideration of action to recommend the board

547
00:52:20,060 --> 00:52:26,260
approve a standard form member service area agreement for water providers obtaining a designation

548
00:52:26,260 --> 00:52:31,620
through the alternative path to designation of a shared water supply, also known as A-DOS.

549
00:52:32,480 --> 00:52:37,800
For that, we will have a kind of a tag team presentation of Ms. Grignano, our manager of

550
00:52:37,800 --> 00:52:45,600
R.D. and Kate Moranzoni. And to talk to us about this, this is I just want to note

551
00:52:45,600 --> 00:52:51,560
that a couple of things, this is a big milestone movement and a step along the way for a very

552
00:52:51,560 --> 00:52:58,360
important decision that the board will ultimately be making and the standard form for member

553
00:52:58,360 --> 00:53:03,760
service area agreements is a critical component of some water providers seeking a designation

554
00:53:03,760 --> 00:53:09,940
through A-DOS, something that has been in the works for a long time and is a, you know, seen

555
00:53:09,940 --> 00:53:16,640
by, you know, in the water industries, a very positive step forward to allow these water providers

556
00:53:16,640 --> 00:53:24,360
to stay in compliance with the groundwater code in recognizing some of the challenges that are present

557
00:53:24,360 --> 00:53:31,040
and doing so in certain areas. I'm also going to mention real briefly that, you know, this board

558
00:53:31,040 --> 00:53:35,680
and has a policy, a general policy, it's called the two-step process, and this is something

559
00:53:35,680 --> 00:53:41,660
that came about as a result of our customer service task force many years ago, where both

560
00:53:41,660 --> 00:53:47,780
members of the public and the board were saying, hey, don't drop something on us and especially

561
00:53:47,780 --> 00:53:53,100
applies to the board action. Don't bring something before us, expect us to act at that same

562
00:53:53,100 --> 00:53:58,780
time without really having had time to digest it and think about it, ask questions, and here

563
00:53:58,780 --> 00:54:05,060
at least at least once before being presented with a question to act on.

564
00:54:05,540 --> 00:54:09,880
In this case, that what we're doing is today is step one before the committee.

565
00:54:10,720 --> 00:54:16,860
We are going to then do our step two at the board in June and while sometimes it's in a

566
00:54:16,860 --> 00:54:21,340
perfect world, we would do two steps before the committee and then move forward to board

567
00:54:21,340 --> 00:54:21,720
action.

568
00:54:21,720 --> 00:54:28,740
But because we have our July break, and because this is such an important item to move down the line,

569
00:54:29,380 --> 00:54:37,180
we have elected to hear it today and asking the committee to make a recommendation to the board today,

570
00:54:37,600 --> 00:54:41,260
full board approval, obviously, of this is what is going to count.

571
00:54:41,760 --> 00:54:47,380
So public service announcement, this is step one, and we will have a step two coming forward,

572
00:54:47,380 --> 00:54:51,980
And I really think that we're doing two things at the same time, honoring the intent of the

573
00:54:51,980 --> 00:54:56,720
two-step process and honoring our commitment to our stakeholders to move things along.

574
00:54:57,240 --> 00:54:59,380
And sometimes we can do both.

575
00:55:00,220 --> 00:55:02,600
And it's a big deal in this committee.

576
00:55:02,680 --> 00:55:08,480
We have blue cards on this item, so we appreciate the people and after we have the presentation

577
00:55:08,480 --> 00:55:14,140
in board discussion, I will invite the submitters of the blue cards up to make some comments

578
00:55:14,140 --> 00:55:20,240
and let you know in advance, we really appreciate that you came to the committee today to talk

579
00:55:20,240 --> 00:55:26,420
to us about this item. So with that long-winded introduction, I will recognize Ms. Grignano

580
00:55:26,420 --> 00:55:32,700
for opening comments on this. Thank you, Madam Chair, and committee members, again for the record,

581
00:55:32,980 --> 00:55:39,500
Laura Grignano's CJRD Manager. Well, today, staff is pleased to be bringing forth to the committee

582
00:55:39,500 --> 00:55:47,720
two standard form MSA agreements for water providers getting designated through the new A-DOS program and I'll

583
00:55:47,720 --> 00:55:56,680
kick off as Madam Chair mentioned. I'll kick off the discussion with just some general background for context and then I will

584
00:55:56,680 --> 00:56:03,700
hand the presentation off to Ms. Moran Zoni who will dive into details of how these agreements are set up to work and how they

585
00:56:03,700 --> 00:56:07,480
different from differ from our traditional MSA agreements.

586
00:56:08,120 --> 00:56:11,840
Because some of these concepts are new to the committee

587
00:56:11,840 --> 00:56:16,480
and to the stakeholders, you'll see us repeating concepts

588
00:56:16,480 --> 00:56:17,700
throughout the presentation.

589
00:56:18,640 --> 00:56:20,360
So we apologize ahead of time.

590
00:56:20,500 --> 00:56:23,520
We may say the same thing three times differently,

591
00:56:23,680 --> 00:56:27,160
but you'll see there's some complex concepts

592
00:56:27,160 --> 00:56:30,780
in these new MSA agreements.

593
00:56:30,780 --> 00:56:37,620
So bear with us and we hope that we can explain it clearly for you.

594
00:56:40,120 --> 00:56:46,160
So much of last year as you roll recall, I brief the committee on the development and

595
00:56:46,160 --> 00:56:51,880
the eventual adoption of the new rules commonly referred to as A-DOS or the alternative

596
00:56:51,880 --> 00:56:54,460
path to a designation of a shared water supply.

597
00:56:54,900 --> 00:57:02,720
Now this program was created to assist city's towns, private water companies, obtain their

598
00:57:02,720 --> 00:57:08,840
designation. There were hurdles that some of these cities, city of Buckeye, Queen Creek, Arizona

599
00:57:08,840 --> 00:57:15,940
Water Company, Epcore, had to overcome those hurdles to become designated. And A-DOS was

600
00:57:15,940 --> 00:57:23,420
a program that was aimed to try to help meet some of those challenges. There are currently three

601
00:57:23,420 --> 00:57:30,540
A-DOS applications in process at the Department of Water Resources. And because it's a prerequisite

602
00:57:30,540 --> 00:57:34,620
to enroll in CHERD as a member service area.

603
00:57:35,280 --> 00:57:39,520
These same three applicants also have pending MSA agreements,

604
00:57:39,960 --> 00:57:44,940
or I'm sorry, pending MSA applications with CHERD.

605
00:57:45,500 --> 00:57:47,040
So that's why we're here.

606
00:57:47,400 --> 00:57:50,200
Over the last few months, CHERD has been working

607
00:57:50,200 --> 00:57:54,100
to develop a new standard form MSA agreement

608
00:57:54,100 --> 00:57:57,400
that can be used to enroll these applicants.

609
00:57:57,400 --> 00:58:04,340
And we started with our traditional MSA agreement, and then we may changes working with our

610
00:58:04,340 --> 00:58:10,180
leading legal staff, where necessary to account for the unique aspects of AdOS.

611
00:58:11,940 --> 00:58:18,740
One primary difference that you will see in the news standard form MSA agreement is the

612
00:58:18,740 --> 00:58:28,220
of an MSA in the Phoenix AMA to elect to temporarily keep any member land parcel obligation

613
00:58:28,620 --> 00:58:31,900
and replenishment assessments tied to the parcel.

614
00:58:32,700 --> 00:58:35,200
So those are essentially, and I'll walk through some illustrations.

615
00:58:35,800 --> 00:58:40,020
Those are essentially the member lands that those providers are currently serving,

616
00:58:40,420 --> 00:58:42,520
allows for a transition period.

617
00:58:42,520 --> 00:58:50,520
This keeps the financial responsibility for the replenishment with the member land land owner for a certain time.

618
00:58:51,740 --> 00:58:58,200
This was the result of last year's Senate Bill 1181 that was passed and signed into law.

619
00:58:58,580 --> 00:59:02,500
I think we last year Mr. Gray referred to it as the Queen Creek Bill.

620
00:59:02,520 --> 00:59:05,480
This was a legislation that was initiated by Queen Creek.

621
00:59:05,480 --> 00:59:15,820
And again, I have a series of illustrations that I'll have upcoming that will help you better understand what this transition period for memory land reporting looks like.

622
00:59:16,220 --> 00:59:33,000
An additional difference between a traditional MSA agreement and the A-DOS MSA agreements includes a consideration that the A-DOS rules provide a substantial volume of groundwater allowance that's given to the water provider upfront.

623
00:59:34,120 --> 00:59:42,540
And this groundwater allowance is a credit that the water provider can use to make pumping

624
00:59:42,540 --> 00:59:47,280
consistent with management goal, very similar to what replenishment also does.

625
00:59:47,960 --> 00:59:55,500
So in order to lead the requirements, they should water supply, you can either replenish your groundwater

626
00:59:55,500 --> 00:59:59,980
that you pumped or you can offset it using groundwater allowance or extinguishment credits.

627
01:00:01,630 --> 01:00:12,410
So another component of A-DOS that makes this unique is its requirement that the water providers obtain alternative supplies.

628
01:00:13,470 --> 01:00:18,650
And these are renewable supplies or non-AMA groundwater supplies.

629
01:00:20,150 --> 01:00:30,230
And I think, as you might recall, when we talked about this, there's a requirement that each time that water provider acquires an additional alternative water supply,

630
01:00:30,230 --> 01:00:38,330
that 25% of that new supply is used to offset the current or the groundwater pumping that they're doing.

631
01:00:40,270 --> 01:00:55,190
So both of which will result likely result in a reduced reliance on CEDGRD, then say a traditional designation that doesn't have that requirement to go out and get renewable supplies to offset the groundwater pumping.

632
01:00:55,190 --> 01:01:08,970
So, both the generous groundwater allowance and the 25% offset were things that considered unique components of the program that staff considered in revising this MSA agreement.

633
01:01:08,970 --> 01:01:25,830
And as you're later from Ms. Moranzoni, these unique aspects of the AZA program have allowed staff to consider minimum reporting requirements that will be tailored to the water providers projected on their long-term reliance on CHRD.

634
01:01:29,780 --> 01:01:41,580
Okay, so before explaining how the mechanisms of the new MSA agreement work, we thought would be helpful to walk you through simple cartoon illustrations of what the process of a member land provider

635
01:01:41,580 --> 01:01:47,580
converting to a traditional member service area looks like and then show you what that

636
01:01:47,580 --> 01:01:53,320
process will look like when a member land provider becomes an A-DOS member service area

637
01:01:53,320 --> 01:01:59,660
and elects to temporarily keep any member land parcel obligation and replenishment assessment

638
01:01:59,660 --> 01:02:06,980
tied to the parcel. Now I know that Mr. Seychelles gave a great simple illustration. I think

639
01:02:06,980 --> 01:02:11,920
It was on the exchange, not too long ago at the board meeting, and so in light of that and

640
01:02:11,920 --> 01:02:17,660
how well it was received, I thought we would do something similar and it's appreciated.

641
01:02:18,980 --> 01:02:22,800
And again, Ms. Moran Zony will cover the details of this process and more detail.

642
01:02:23,260 --> 01:02:28,080
So if something isn't clear at first, I think her slides will help you understand.

643
01:02:28,840 --> 01:02:34,880
These examples should provide additional context to help you visualize the primary differences.

644
01:02:34,880 --> 01:02:41,100
So, this first illustration depicts an undesignated water provider.

645
01:02:43,500 --> 01:02:48,580
So, we have an undesignated water provider serving uses in its service area.

646
01:02:49,200 --> 01:02:54,880
When a developer wants to build a subdivision, they have to go and obtain a certificate

647
01:02:54,880 --> 01:03:00,620
of a shared water supply for that individual subdivision that to get that certificate.

648
01:03:00,620 --> 01:03:05,500
get they have to enroll that subdivision has to enroll in the CIGRD as a member land.

649
01:03:07,160 --> 01:03:13,760
So this is the an illustration of an undesignated water provider, that water provider is

650
01:03:13,760 --> 01:03:20,620
reporting to CIGRD each year they use to the the member lands, the water being delivered

651
01:03:20,620 --> 01:03:24,840
to the member lands and they report a certain amount of excess groundwater that member

652
01:03:24,840 --> 01:03:28,380
land is using and CIGRD replenishes it.

653
01:03:28,380 --> 01:03:43,580
They do not, the surrounding, or the uses, outside of those, of those member lands, so the illustrated by the industrial uses, do not have are not regulated under the ShardwaterSpy program.

654
01:03:50,890 --> 01:04:03,070
When this undesignated water provider becomes designated, then all of the water uses within the water provider's service area, including the non-residential uses, now must comply with the A-DOS program.

655
01:04:03,070 --> 01:04:09,430
And it becomes a water provider that is now responsible for paying the replenishment assessments.

656
01:04:10,770 --> 01:04:13,250
And do directly to C-A-G-R-D.

657
01:04:14,050 --> 01:04:21,390
So now you have a designate provider, their entire service area has regulated under the Assured Water Supply Program.

658
01:04:24,810 --> 01:04:26,490
This changes the billing.

659
01:04:26,710 --> 01:04:31,110
We are not billing the individual member land homeowners via their property tax.

660
01:04:31,110 --> 01:04:37,130
This is now just one direct invoice to the water provider, city town or private water company,

661
01:04:38,350 --> 01:04:41,050
from CIGRD to the water provider.

662
01:04:41,250 --> 01:04:48,590
Then they can determine how they want to collect that from their customers through their water bills.

663
01:04:50,150 --> 01:04:56,570
So that's how the member land provider to traditional MSA works.

664
01:04:59,040 --> 01:05:06,880
Okay, so in contrast to this, now let's take a look at what happens when an undisognated water provider becomes an A-DOS MSA.

665
01:05:07,200 --> 01:05:12,100
And elects to keep their existing member land reporting and assessments with the member land homeowners.

666
01:05:15,400 --> 01:05:19,040
So, become a designated provider through A-DOS.

667
01:05:24,050 --> 01:05:28,870
Once a provider becomes an MSA under A-DOS, it is required to report access.

668
01:05:28,870 --> 01:05:36,070
It will be required to report excess groundwater to C.A.G.R.D. based on its total deliveries for its whole service area.

669
01:05:36,710 --> 01:05:43,090
However, if they elect for the first 10 years, the member lands can retain the parcel replenishment obligation.

670
01:05:43,610 --> 01:05:49,450
In other words, the homeowner continues to pay the replenishment assessments on their property tax.

671
01:05:50,030 --> 01:05:54,930
This mechanism allows the water provider to ease into taking the financial responsibility

672
01:05:54,930 --> 01:05:59,190
for replenishment of the entire service area.

673
01:06:00,630 --> 01:06:05,070
So we will be collecting both from the property owner

674
01:06:05,070 --> 01:06:10,490
as well as from the water provider during this transition period.

675
01:06:10,990 --> 01:06:14,990
And again, Ms. Moranzoni will go into the details on how that will be done.

676
01:06:16,110 --> 01:06:19,190
And again, this was this transitional period,

677
01:06:19,770 --> 01:06:22,930
was established through the SB 1181

678
01:06:22,930 --> 01:06:25,310
and 81, or the Queen Creek legislation last,

679
01:06:25,450 --> 01:06:26,750
that was approved last year.

680
01:06:29,100 --> 01:06:33,120
So under SB 1181's transitional period,

681
01:06:33,540 --> 01:06:36,720
in year 11, the water provider must start to assume

682
01:06:36,720 --> 01:06:41,600
a percentage of the parcel replenishment

683
01:06:41,600 --> 01:06:44,100
until it is all assumed by year 20.

684
01:06:45,200 --> 01:06:50,580
So gradually starting in year 11, 10% than 20, 30,

685
01:06:50,580 --> 01:06:57,760
for gradually that water provider assumes that financial obligation and replenishment.

686
01:07:01,300 --> 01:07:07,520
Then until after year 20, the water provider assumes all financial responsibility for replenishment,

687
01:07:07,560 --> 01:07:10,240
like a traditional member service area.

688
01:07:13,220 --> 01:07:17,840
I'm just going to pause you right now to check and see if there's any questions on that

689
01:07:17,840 --> 01:07:18,440
information.

690
01:07:19,960 --> 01:07:20,740
Yes.

691
01:07:22,040 --> 01:07:22,300
Yes.

692
01:07:22,700 --> 01:07:23,040
Yes.

693
01:07:23,040 --> 01:07:30,600
officer. This is pretty complex transaction in my mind. So basically, you're saying that the

694
01:07:30,600 --> 01:07:36,720
user provides basically 125% of what they're going to use so that we can bank 25% of the

695
01:07:36,720 --> 01:07:37,320
water.

696
01:07:39,890 --> 01:07:55,230
Madam Chair, Board Member Fisher, the water provider through their designation of a

697
01:07:55,230 --> 01:08:00,770
essentially dedicate 25% of that to offset the groundwater pumping.

698
01:08:02,370 --> 01:08:07,410
So the GRDC is the benefit of that.

699
01:08:07,470 --> 01:08:14,590
We'll see the benefit of that through time by a decrease in groundwater reliance by that water provider.

700
01:08:15,310 --> 01:08:22,890
And therefore a decrease in potential in reliance on the GRDC.

701
01:08:23,650 --> 01:08:28,890
It's the Department of Water Resources that's requiring the offset through the designation.

702
01:08:29,210 --> 01:08:32,430
That's not included in this MSA agreement.

703
01:08:37,120 --> 01:08:40,460
And the provision that they keep going for the first 10 years,

704
01:08:42,930 --> 01:08:44,030
what's the effect of that?

705
01:08:44,130 --> 01:08:50,130
I mean, does that just help them or is that if they keep it for the first 10 years,

706
01:08:50,330 --> 01:08:55,850
do we have to provide the water for the first 10 years?

707
01:08:55,850 --> 01:09:02,010
Madam Chair, Board Member Fisher, really the first ten years is really more about just

708
01:09:02,010 --> 01:09:08,190
who is financially responsible for paying the replenishment for the replenishment

709
01:09:08,190 --> 01:09:11,310
of the groundwater being delivered to those member lands.

710
01:09:12,650 --> 01:09:13,690
It's all the same water.

711
01:09:13,770 --> 01:09:21,850
The provider continues to serve the customers the same way, they're just the reporting responsibility

712
01:09:21,850 --> 01:09:27,630
you just stays with the landowner, whereas in a traditional MSA, we would have just build

713
01:09:27,630 --> 01:09:31,530
the water provider for replenishment obligation of the entire service area.

714
01:09:32,110 --> 01:09:41,710
So it really is more about keeping that financial responsibility separate for the transitional

715
01:09:41,710 --> 01:09:42,310
period.

716
01:09:42,770 --> 01:09:49,630
So we don't have to provide any financing, but they're responsible for that part of the

717
01:09:50,110 --> 01:09:55,750
County. Madam Chair and board member, Fisher, if I understand your question, yes, we don't

718
01:09:55,750 --> 01:09:57,170
we don't provide any of financing.

719
01:09:59,680 --> 01:10:02,440
Great. No, and thank you. And if you don't mind, I mean,

720
01:10:02,680 --> 01:10:09,620
we'll do, you know, like I guess this is, this is, this is very, you know, data intense and

721
01:10:09,620 --> 01:10:14,280
kind of weedy and important. And so yeah, I'd rather, I'd rather break as we have the questions

722
01:10:14,280 --> 01:10:19,380
to move through, because I would not remember my question at the end of the presentation probably.

723
01:10:19,380 --> 01:10:23,060
So, all right, yeah, board member Miller has a question.

724
01:10:25,880 --> 01:10:28,460
And I, not necessarily, well, it is a question.

725
01:10:29,100 --> 01:10:34,720
It's, this mechanism is a way so that the new designated provider

726
01:10:34,720 --> 01:10:39,140
doesn't have to assume 100% of all of this just,

727
01:10:39,160 --> 01:10:44,500
it is a way for them to, to ease in to the, the, the, the total obligation

728
01:10:44,500 --> 01:10:49,020
of the replenishment dollars that will be put out there.

729
01:10:49,020 --> 01:10:57,960
It's just the way that easy homeowners into the program over that 20-year period, basically.

730
01:10:58,700 --> 01:11:02,000
Yes, Madam Chair, Board Member Miller, Spot-On.

731
01:11:03,140 --> 01:11:03,880
I just want to be clear.

732
01:11:04,240 --> 01:11:04,460
Okay.

733
01:11:04,840 --> 01:11:05,020
Great.

734
01:11:05,140 --> 01:11:05,600
Thank you.

735
01:11:05,800 --> 01:11:06,080
All right.

736
01:11:06,440 --> 01:11:06,640
Continue.

737
01:11:07,040 --> 01:11:07,260
Okay.

738
01:11:07,480 --> 01:11:12,440
And again, you'll probably hear these concepts repeated a number of times,

739
01:11:13,100 --> 01:11:14,240
so hopefully it'll be a little clear.

740
01:11:14,240 --> 01:11:22,660
I'm going to hand the presentation off to Ms. Moran Zoni now to dive into some more details on the member land and members service area requirements.

741
01:11:23,420 --> 01:11:26,060
Great. Thank you very much. And welcome Ms. Moran Zoni.

742
01:11:29,840 --> 01:11:37,620
Thank you so much and good afternoon Madam Chair and members of the committee for the record. My name is Kate Moran Zoni and the planning analyst with the GRD.

743
01:11:37,620 --> 01:11:43,180
And as Ms. Grignana said, I will be going into some more detail on some of these unique

744
01:11:43,180 --> 01:11:47,320
Adios components, like the transitional reporting period, which we were just introduced

745
01:11:47,320 --> 01:11:49,700
to, and the minimum reporting requirement.

746
01:11:50,860 --> 01:11:57,920
Because there are a lot of ideas to keep straight, this next section is going to begin by

747
01:11:57,920 --> 01:12:03,180
just laying the groundwork for traditionally what sorts of requirements need to be met by our

748
01:12:03,180 --> 01:12:08,180
and on the member land side, what mechanism are they using and same for the MSA?

749
01:12:09,380 --> 01:12:15,280
So with that, on the screen, I know I've got the fun illustrations, but I'm doing a table.

750
01:12:16,600 --> 01:12:20,900
So in this table, the center column is going to be the requirements.

751
01:12:21,860 --> 01:12:28,760
And depending on if you're a member land or MSA, there are, again, these different mechanisms that are used to meet that requirement.

752
01:12:30,100 --> 01:12:37,180
So, the first one here is annual reports and member land annual reports are at the parcel

753
01:12:37,180 --> 01:12:37,600
levels.

754
01:12:38,120 --> 01:12:44,140
So, the provider tells us how much total water, groundwater, excess groundwater, was used

755
01:12:44,140 --> 01:12:46,940
on a particular home or a common area.

756
01:12:48,100 --> 01:12:54,260
For MSAs, it's a little bit different and we actually just look at a service area level.

757
01:12:54,260 --> 01:12:59,160
So for the whole provider, how much, again,

758
01:12:59,400 --> 01:13:01,940
groundwater and excess groundwater was delivered.

759
01:13:03,260 --> 01:13:05,860
And annual reports are very important to us

760
01:13:05,860 --> 01:13:09,200
because that is how we arrive at our replenishment

761
01:13:09,200 --> 01:13:10,420
obligation numbers.

762
01:13:11,480 --> 01:13:14,000
And that obligation translates to assessments.

763
01:13:15,280 --> 01:13:18,520
So for member lands, it's that homeowner that's paying

764
01:13:18,520 --> 01:13:21,860
the parcel replenishment assessment on their property tax

765
01:13:21,860 --> 01:13:29,200
And for MSAs, similarly tied to that annual report mechanism, it's that one volume of excess

766
01:13:29,200 --> 01:13:32,700
groundwater multiplied by our assessment rate.

767
01:13:33,400 --> 01:13:38,380
And that is, and we wish to them, and what's called a replenishment tax, and, again,

768
01:13:38,480 --> 01:13:44,000
that is paid for by the water provider on the MSAs side, homeowner for the member lands.

769
01:13:48,300 --> 01:13:54,300
So another facet of property taxes and replenishment taxes for our members are annual membership

770
01:13:54,300 --> 01:14:02,100
and AMDs are the cost of being a member, regardless of if any obligation is being

771
01:14:02,100 --> 01:14:08,200
encouraged by the member. Member lands are assessed on AMD for a lot, so per

772
01:14:08,200 --> 01:14:15,040
housing unit, commercial unit, common area, MSAs are assessed per acre-foot of

773
01:14:15,040 --> 01:14:23,280
expected GRD reliance. And so this calculation of the distribution and the

774
01:14:23,280 --> 01:14:28,800
some cells are outlined both in statute, which as we heard earlier was recently amended to

775
01:14:28,800 --> 01:14:32,320
keep rates stable, and then also by board policy.

776
01:14:36,600 --> 01:14:39,700
Our next requirement here are activations.

777
01:14:40,660 --> 01:14:46,740
So for any law enrolled in the GRD, regardless of membership type, when the home builder is ready

778
01:14:46,740 --> 01:14:54,120
to sell off the home, they have to obtain a public report in order to do that sale. And prior to

779
01:14:54,120 --> 01:14:57,940
getting the public report, they have to show that they have activated those lots.

780
01:14:59,640 --> 01:14:59,960
So, they come...

781
01:15:00,000 --> 01:15:17,960
The GRD and pay a per watt activation fee, and the rate itself is dependent on the characteristics of either the member lands and it's based on one day in roll or the member service area, and that's similarly like the AMD's kind of tied to that near-term reliance.

782
01:15:22,000 --> 01:15:30,720
And the last requirement we have here is the replenishment reserve fees. So there are two ways that GRD collects for the replenishment reserve.

783
01:15:30,720 --> 01:15:44,940
The first one is the replenishment reserve charge, which I think most folks are familiar with and that's the replenishment reserve component of our assessment rate, so it's incorporated into those obligation assessments.

784
01:15:46,300 --> 01:15:50,620
The fee is separate from those traditional assessments.

785
01:15:50,620 --> 01:15:56,800
For member lands, it's an additional fee that the home builder pays when they come into

786
01:15:56,800 --> 01:15:57,880
active a lot.

787
01:15:58,940 --> 01:16:03,980
For MSAs, it's based on something called the excess groundwater increment.

788
01:16:04,860 --> 01:16:06,060
And this is defined in statute.

789
01:16:06,760 --> 01:16:14,500
And essentially what the increment is is when a provider comes in and has a new highest volume of obligation.

790
01:16:15,280 --> 01:16:24,610
So they take that compared to the previous highest volume and that difference there is the increment and so there's a fee associated with that increase

791
01:16:26,140 --> 01:16:30,540
So I know this is quite dense. I thought I'm hoping to get to the pause and see if there's anything I can clarify.

792
01:16:31,200 --> 01:16:33,500
Great. Thank you. Any questions on any of this?

793
01:16:35,180 --> 01:16:36,500
Either none or we're all just...

794
01:16:37,560 --> 01:16:48,280
We can always revisit, we're all this, we're all just trying to, you know, we're, we want houses and, you know, in era, no, this is great, no, this is great, keep going.

795
01:16:50,100 --> 01:17:00,240
So what traditionally happens when a variety of that serving member lands gets designated is that all of those mechanisms on the left side go away.

796
01:17:00,240 --> 01:17:06,960
So, there's no longer any distinction between a previously enrolled member land and the MSA.

797
01:17:08,160 --> 01:17:14,720
That is not the case for aid-offs providers that are taking advantage of that transitional reporting period.

798
01:17:15,840 --> 01:17:25,180
So, in those instances, some of those member land mechanisms hang on, and those are the mechanisms related to obligation and assessments.

799
01:17:26,480 --> 01:17:35,500
You might have noted that on the MSA side, this mechanism changed for punishment obligation from

800
01:17:35,500 --> 01:17:39,180
service area to non-parcel replenishment obligation.

801
01:17:40,220 --> 01:17:42,220
And so this is one of those kind of new concepts.

802
01:17:43,460 --> 01:17:49,260
So essentially, when these providers are reporting to us, they tell us, this is the volume

803
01:17:49,260 --> 01:17:53,160
of excess groundwater for the whole service area in this given year.

804
01:17:53,160 --> 01:18:01,340
And they get to elect how much of that excess groundwater is going to be, again, retained on those parcels.

805
01:18:02,100 --> 01:18:08,120
And whatever that difference is, if any, that is what we're referring to as the non-parsal replenishment application,

806
01:18:08,360 --> 01:18:14,660
and that's what the MSAs will be invoice for on the replenishment tax as far as application.

807
01:18:14,660 --> 01:18:25,900
And then those three requirements at the bottom of the table, those weren't called out in that SB 1181, that miscarriage amount of disgust.

808
01:18:25,960 --> 01:18:32,320
So it's really just this parcel replenishment obligation and assessment that stays distinct.

809
01:18:33,720 --> 01:18:41,780
And then once the transitional reporting period concludes, we are back to this, what looks like a standard MSA.

810
01:18:41,780 --> 01:18:44,960
So there's no distinction between what you

811
01:18:44,960 --> 01:18:45,860
speak in member land.

812
01:18:46,900 --> 01:18:48,400
It's all officially absorbed.

813
01:18:48,760 --> 01:18:50,460
And there's no separate reporting mechanisms.

814
01:18:51,840 --> 01:18:51,860
Great.

815
01:18:52,080 --> 01:18:55,180
I do have a question on the non-parcel replenishment

816
01:18:55,180 --> 01:18:57,840
obligation when that kicks in.

817
01:18:58,020 --> 01:19:00,580
I think I understand it's the everything else

818
01:19:00,580 --> 01:19:03,120
that's not a member land within the service area.

819
01:19:03,500 --> 01:19:08,560
Does that start immediately or is there a ramp into that?

820
01:19:09,220 --> 01:19:17,720
That I'm chair, yes, so that starts immediately, however the actual distribution of excess

821
01:19:17,720 --> 01:19:21,980
groundwater, like how much is staying with a member land back in very from year to year and

822
01:19:21,980 --> 01:19:29,480
the provider can choose to have that volume be the whole amount of excess groundwater, so in the

823
01:19:29,480 --> 01:19:32,080
first year there's not any non-parcel replenishment obligation.

824
01:19:32,080 --> 01:19:38,340
So, that must say really has full flexibility on how it gets lit up.

825
01:19:40,250 --> 01:19:40,650
Thank you.

826
01:19:41,610 --> 01:19:42,290
But remember Fisher?

827
01:19:43,590 --> 01:19:44,770
Yes, thank you.

828
01:19:45,770 --> 01:19:47,550
So, something that you said just kind of treats, something.

829
01:19:48,110 --> 01:19:55,930
So, you said that they report on the water, but is it self-reporting or is there

830
01:19:55,930 --> 01:20:00,670
some mechanism to ensure that reporting is accurate?

831
01:20:01,570 --> 01:20:09,510
Madam Chair and Board Member Fisher, so there are, the GERD has one annual report typically

832
01:20:09,510 --> 01:20:14,430
for MSAs and it's just one sheet and it says, tell us how much groundwater you use times

833
01:20:14,430 --> 01:20:19,890
your minimum reporting requirement and that's the amount of excess for MS or excuse me for

834
01:20:19,890 --> 01:20:20,570
member lands.

835
01:20:20,890 --> 01:20:28,590
It's much more finite at a parcel level, so the way, there's kind of a few ways that we can

836
01:20:28,590 --> 01:20:34,750
that was being reported to us is really what's being used. The first is that these providers

837
01:20:34,750 --> 01:20:40,610
have to submit reports to the Arizona Department of Water Resources. So there's a built-in

838
01:20:40,610 --> 01:20:48,210
verification that way and for member lands or providers that serve member lands. The GRD does have

839
01:20:48,210 --> 01:20:54,610
statutory authority to occasionally conduct records inspections and just ensure that we understand

840
01:20:54,610 --> 01:20:59,370
how they're taking their raw data and fitting it into our personal level.

841
01:21:02,130 --> 01:21:02,530
Thank you.

842
01:21:02,910 --> 01:21:04,410
I trust people, but I do like to verify.

843
01:21:04,870 --> 01:21:05,130
Soon.

844
01:21:06,070 --> 01:21:08,370
Well, and I think along those lines, it's a little bit of a detour.

845
01:21:08,830 --> 01:21:13,370
We've, in the past, if I recall, we've done this kind of just spot check.

846
01:21:13,630 --> 01:21:16,430
As part of our internal audit, you know, responsibilities.

847
01:21:17,030 --> 01:21:19,410
It's not, it's not that we don't trust or not trust.

848
01:21:19,590 --> 01:21:25,510
It's we have a duty to audit and it's not.

849
01:21:25,510 --> 01:21:31,350
the ability and the staff to go check all everybody, but if I, and I will look to Ms.

850
01:21:31,370 --> 01:21:36,150
Graniano, if I recall, the results of our audits have always been that the reporting

851
01:21:36,150 --> 01:21:41,830
has been, you know, our independent look has been in line with the reports we've been given

852
01:21:41,830 --> 01:21:47,130
and we have not, you know, we've not found any kind of busts and not as I glance over to

853
01:21:47,130 --> 01:21:48,530
Ms. Graniano for verification.

854
01:21:49,250 --> 01:21:54,730
Madam Chair, that's correct, and we are conducting some records inspection this year that the

855
01:21:54,730 --> 01:22:03,110
will hear reports on later this year. We also do extensive QAQC queries on all of the data that's

856
01:22:03,110 --> 01:22:08,610
submitted to us from all of the water providers every year. So we're looking at the parcel of my

857
01:22:08,610 --> 01:22:15,090
team works really hard to review those do we have a number of queries that we run to look at

858
01:22:15,090 --> 01:22:20,930
variances over the last three years of water use. So if there's a spike in water for that parcel

859
01:22:20,930 --> 01:22:26,990
So we're looking into it, is that just, you know, somebody fat finger the data wrong or is that really a leak?

860
01:22:27,530 --> 01:22:32,150
Did they, did they move in a new owner come in and, and plant a lot of, or put in a pool?

861
01:22:32,590 --> 01:22:42,110
So we're doing that check extensively in reports are due to us the same day they're due to the Department of Water Resources March 31 of each year.

862
01:22:42,110 --> 01:22:49,070
And then our team has approximately three to four months to do all of the QHC on those, and in addition,

863
01:22:49,670 --> 01:22:55,050
conduct potentially some additional inspection notices with individual providers.

864
01:22:56,310 --> 01:22:56,670
Thank you.

865
01:22:57,050 --> 01:22:57,630
Barbara Miller.

866
01:22:58,690 --> 01:23:04,250
Yeah, and I think it's to the advantage of the water providers to really, they are looking

867
01:23:04,250 --> 01:23:09,930
at everything there, either for billing purposes or is there a leak in the system?

868
01:23:09,930 --> 01:23:15,490
I mean, it's to their advantage to make sure that they monitor it very close, at least that's

869
01:23:15,490 --> 01:23:17,590
been my experience with the water companies.

870
01:23:19,070 --> 01:23:24,510
Yeah, no, and that's an excellent question, and again, something that bears bringing up occasionally

871
01:23:25,670 --> 01:23:29,170
because, you know, especially sitting up here, it's like, how is all this happening?

872
01:23:29,330 --> 01:23:31,190
You know, who's doing what?

873
01:23:31,370 --> 01:23:37,970
And there is a very thorough and robust process, you know, the back of the house, that verifies

874
01:23:37,970 --> 01:23:42,670
all this. So, the important and great question. Thank you. All right, please continue.

875
01:23:43,510 --> 01:23:44,210
Thank you, Madam Chair.

876
01:23:46,820 --> 01:23:51,880
So that was quite a bit of detail. So I'd like to zoom out for a moment

877
01:23:51,880 --> 01:23:58,460
and just quickly summarize the key points that have been discussed so far. So the first thing

878
01:23:58,460 --> 01:24:04,980
that I would like to emphasize is that an ADOS is still a designation, meaning that the entire service

879
01:24:04,980 --> 01:24:11,380
area is designated. Sometimes with this transitional reporting period and these transitional member

880
01:24:11,380 --> 01:24:17,580
lands, there's a thought that the service area has these holes and it where the member lands

881
01:24:17,580 --> 01:24:23,060
are that they're not included. That's where we get the Swiss cheese term. And so it's not

882
01:24:23,060 --> 01:24:30,340
the case, it's a full, it fully encompasses everything that the provider serves. And then

883
01:24:30,340 --> 01:24:37,740
The last point here is about the groundwater offset, and so, as we touched on in the beginning

884
01:24:37,740 --> 01:24:44,000
of this presentation, providers will be taking any new alternative supplies and a portion

885
01:24:44,000 --> 01:24:50,040
of that goes towards reducing the groundwater in their designation, and this is actually going

886
01:24:50,040 --> 01:24:56,200
to lead to less reliance on the GERD over time, which is not typically what we see, and

887
01:24:56,200 --> 01:25:02,660
So, this led to a consideration that potentially the minimum reporting requirement could be adjusted downwards.

888
01:25:05,620 --> 01:25:12,620
So, you can talk a bit more about minimum reporting requirements and what they are and why we have them.

889
01:25:14,890 --> 01:25:22,790
So, for some background, members service areas typically do not want to report excess groundwater to the GERD.

890
01:25:22,790 --> 01:25:33,010
When we did stakeholder outreach for the plan of operation, the GERD was sometimes referred to as a supply of last resort, typically because of the financial implications.

891
01:25:34,250 --> 01:25:47,490
So if the GERD isn't making this groundwater goal consistent, how are the providers doing it, and they can use extinguishment credits to do so, or they can do groundwater allowance.

892
01:25:48,410 --> 01:25:53,930
and the water providers through AdOS get a very hefty groundwater allowance.

893
01:25:55,210 --> 01:26:02,990
So the risk with that is if a provider isn't required to report any of their

894
01:26:03,690 --> 01:26:08,170
ground water as excess and they go through and use up all of their groundwater

895
01:26:08,170 --> 01:26:13,750
allowance, when that runs out, the GSD suddenly overnight has this huge spike

896
01:26:13,750 --> 01:26:23,050
sometimes call it the the cliff. So that becomes an issue because we haven't been collecting on any

897
01:26:23,050 --> 01:26:31,030
obligation and so just a lack of revenue. So that led to the minimum reporting requirement being

898
01:26:31,030 --> 01:26:37,850
implemented in MSA and member land agreements and the goal there is just to ensure that

899
01:26:37,850 --> 01:26:43,010
portion of that groundwater use is reported as excess so that we can be collecting revenue

900
01:26:43,010 --> 01:26:48,790
and preparing for that eventual grader reliance. So that portion has

901
01:26:48,790 --> 01:26:54,630
typically been two thirds. So take the total groundwater used, multiplied by two thirds,

902
01:26:54,630 --> 01:26:57,990
and that is your excess. However,

903
01:27:00,170 --> 01:27:03,730
the aid us providers, because they're going to rely on us

904
01:27:03,730 --> 01:27:07,370
over time, most likely things look a little bit different.

905
01:27:10,120 --> 01:27:11,620
So adjusting them in a mum reporting

906
01:27:11,620 --> 01:27:19,780
requirement is one way to align that reliance with the revenue collection. In order to come up with

907
01:27:19,780 --> 01:27:27,040
a minimum reporting requirement that is different than the traditional fraction, GRD has established

908
01:27:27,040 --> 01:27:34,720
a uniform standard approach to arrive at that number and it's based on the provider's portfolio

909
01:27:34,720 --> 01:27:40,560
and their designation and they're projected long-term reliance and generally it lands somewhere

910
01:27:40,560 --> 01:27:48,540
between a third and two-thirds. A couple of things to note on that are that in the

911
01:27:48,540 --> 01:27:54,380
panel AMA because the groundwater allowances are so substantial and also perpetual for some

912
01:27:54,380 --> 01:28:02,140
amounts that minimum might be a little bit different. And then also GERDI has historically

913
01:28:02,140 --> 01:28:07,500
provided a ramp up to that minimum reporting requirement and the purpose for that is kind

914
01:28:07,500 --> 01:28:14,400
of too old helps the provider not have to be facing down this obligation overnight financially

915
01:28:14,400 --> 01:28:18,500
and it also helps us not have to face down a huge spike in obligation.

916
01:28:20,880 --> 01:28:22,720
So with the philosophy

917
01:28:22,720 --> 01:28:27,780
of aid as being based on the provider getting new supplies, reducing that groundwater volume,

918
01:28:29,600 --> 01:28:32,700
That is obviously the goal, but in the meantime,

919
01:28:33,440 --> 01:28:37,160
GERD is assuming the risk of all that groundwater.

920
01:28:38,540 --> 01:28:41,800
And so in the agreement, we've built in some flexibility

921
01:28:41,800 --> 01:28:45,240
so that if the provider has not decreased

922
01:28:45,240 --> 01:28:49,000
their reliance on groundwater in 25 years,

923
01:28:49,620 --> 01:28:52,860
then that minimum is going to be adjusted back to two thirds

924
01:28:52,860 --> 01:28:55,780
and again, this kind of acts as like a ramp

925
01:28:56,480 --> 01:29:01,780
rather a smoothing of the cliff, so that we're not facing down this cliff again.

926
01:29:04,140 --> 01:29:05,060
It slows it.

927
01:29:05,200 --> 01:29:05,500
Yes.

928
01:29:05,520 --> 01:29:07,320
A slope, but if it's not a cliff, it's a slope.

929
01:29:07,560 --> 01:29:07,720
Right, right.

930
01:29:14,340 --> 01:29:25,160
So the other, while this minimum reporting requirement being adjusted downward is beneficial to the

931
01:29:25,160 --> 01:29:30,240
We've been meeting with them, we've heard that they want to use this groundwater allowance

932
01:29:30,240 --> 01:29:32,080
this asset that they get through eight hours.

933
01:29:32,380 --> 01:29:38,140
And so having a lower minimum gives them the opportunity to use it.

934
01:29:38,320 --> 01:29:43,100
The other part is that, again, it uses that financial burden on them because we want them

935
01:29:43,100 --> 01:29:44,580
to go out and get these new supplies.

936
01:29:44,980 --> 01:29:49,760
We don't want our providers to have to develop these huge amounts of monetary resources

937
01:29:49,760 --> 01:29:55,720
is to the GRD when they could be using those to go out and develop their own renewable portfolios.

938
01:29:56,720 --> 01:29:59,980
I'll note the asterisk on the first bullet point, so the ADA...

939
01:30:00,000 --> 01:30:11,540
Rules do cap the amount of groundwater in a provider's designation. However, there are programs that could add physical availability, so increase that volume of groundwater.

940
01:30:13,400 --> 01:30:25,620
So, act urban is one of those. And because of that, we did build in some more flexibility into the agreement so that we could adjust the minimum as need be, because more groundwater alliance is more risk for us.

941
01:30:28,630 --> 01:30:35,450
And so this last slide is meant to put some of those puzzle pieces together for all the different topics we've been discussing.

942
01:30:36,570 --> 01:30:48,050
So the minimum reporting requirement, whatever that number is, decided to be for that specific provider, will be applied to the total groundwater used in the whole service area.

943
01:30:49,130 --> 01:31:02,670
Now, if the provider has elected to do this transitional reporting, they get to decide how much of that minimum volume of access stays with the parcels or is taken on as non-parsal replenishment obligation.

944
01:31:03,750 --> 01:31:16,650
And because the minimum reporting requirements in the member lane agreements are suspended, the provider really has maximum flexibility to do what they need to do as they see fit to achieve those goals.

945
01:31:17,550 --> 01:31:21,890
So, I, with that, unless there are any questions, I'll pass it back over to Ms.

946
01:31:21,890 --> 01:31:23,650
Grignano for some closing comments.

947
01:31:24,110 --> 01:31:24,230
Great.

948
01:31:25,390 --> 01:31:26,190
Or, remember Miller?

949
01:31:29,090 --> 01:31:31,770
Okay, we'll let, we'll let, um, great.

950
01:31:32,730 --> 01:31:37,070
Then we'll, we'll get the wrap up and then we'll have a chance to have any other committee

951
01:31:37,070 --> 01:31:38,290
comments or questions.

952
01:31:38,470 --> 01:31:43,430
And then after that, I will invite the blue card people to come up and give us their

953
01:31:43,430 --> 01:31:44,630
comments as well.

954
01:31:45,150 --> 01:31:45,330
Great.

955
01:31:45,410 --> 01:31:46,090
And I'll be brief.

956
01:31:46,090 --> 01:31:56,150
Madam Chair, I just wanted to wrap things up by saying that this is like you said an action or an item schedule for consideration of action by the committee.

957
01:31:57,070 --> 01:32:01,270
There are two standard form MSA agreements in your packet.

958
01:32:01,470 --> 01:32:11,550
One is for water providers in the Phoenix AMA that elect to retain the member land parcel of replenishment and the other is if they do not elect to do that.

959
01:32:11,550 --> 01:32:16,150
So it's closer to that more of a traditional MSA.

960
01:32:16,430 --> 01:32:21,850
But it also could be used by the penow water providers that are becoming

961
01:32:21,850 --> 01:32:24,570
designated through A-DOS because as of yet,

962
01:32:24,810 --> 01:32:27,570
penow providers don't currently have that legal ability

963
01:32:27,570 --> 01:32:29,430
to do that transition period.

964
01:32:30,410 --> 01:32:33,750
As Mr. Gray mentioned, though, Senate Bill 1393,

965
01:32:33,930 --> 01:32:37,370
if passed, would then allow them to be able to do that

966
01:32:37,370 --> 01:32:39,730
like the Phoenix AMA water provider.

967
01:32:39,730 --> 01:32:42,250
So we have the two standard forms just for the one that

968
01:32:42,250 --> 01:32:46,150
elects and then a panel or possibly a Phoenix provider that

969
01:32:46,150 --> 01:32:51,790
doesn't elect to retain those parcel member replenishment.

970
01:32:52,150 --> 01:32:55,310
Again, because in rolling in the G-R-D is a prerequisite

971
01:32:55,310 --> 01:32:59,310
for obtaining a designation and because the committee

972
01:32:59,310 --> 01:33:04,410
and board have recessed in July, applicants and staff wanted

973
01:33:04,410 --> 01:33:08,050
to try to get this to the committee now and to the board

974
01:33:08,050 --> 01:33:08,950
before that recess.

975
01:33:08,950 --> 01:33:14,150
So with that, Ms. Moran Zoni and I are happy to answer any questions.

976
01:33:14,410 --> 01:33:16,250
Great, thank you very much for that, Board Member Miller.

977
01:33:17,630 --> 01:33:30,410
Thank you, Madam Chair, and I want to be the optimist that I am watching House Bill 2753, which is the mirror, I believe, of 13.

978
01:33:32,710 --> 01:33:40,250
So, we pass all of this. We won't have to come back and modify anything for any other designation for some other reason.

979
01:33:40,670 --> 01:33:45,330
This applies to anybody that goes to the ADI's process at this time.

980
01:33:45,910 --> 01:33:46,750
This is good to go.

981
01:33:46,890 --> 01:33:52,670
Madam Chair and Board Member Miller, that is how we have structured why we have to.

982
01:33:53,150 --> 01:33:53,570
Yes.

983
01:33:54,190 --> 01:34:00,350
Okay, I just want to make sure that there's not another hang up at some place that happens occasionally.

984
01:34:01,650 --> 01:34:15,110
And remember, that's a great point just to reiterate that these standard form agreements that we as a committee, you know, get to examine and learn about and recommend to the board. So they'd be approved.

985
01:34:15,810 --> 01:34:22,950
That's exactly what it gives the staff the ability to proceed with these agreements without having to keep coming back to the board.

986
01:34:22,950 --> 01:34:26,570
And the only time that it would come back to the board

987
01:34:26,570 --> 01:34:32,110
is if there was a circumstance that was there's substantial changes.

988
01:34:32,390 --> 01:34:35,250
So there's within this standard form agreement,

989
01:34:35,490 --> 01:34:38,970
there's always as long as it's minor changes in tweaks.

990
01:34:39,510 --> 01:34:43,790
This form has been crafted and worked on with our stakeholders

991
01:34:43,790 --> 01:34:47,950
to accommodate everything and that doesn't mean that in the water world

992
01:34:47,950 --> 01:34:50,650
something completely new is going to bubble up.

993
01:34:50,650 --> 01:34:55,810
if something happened like that, then at the discretion of staff, they would, and knowing how

994
01:34:55,810 --> 01:35:02,210
staff is very considerate of saying, hey, that's a little far afield.

995
01:35:02,230 --> 01:35:04,390
We need to bring this back to the board.

996
01:35:05,210 --> 01:35:08,850
Then it would come back and it would come back through the committee and that would be a one-off

997
01:35:08,850 --> 01:35:09,450
situation.

998
01:35:10,050 --> 01:35:16,310
But the intention here is with approval of standard form agreements, you know, where they

999
01:35:16,310 --> 01:35:22,230
can proceed and that does a couple of things that allows these agreements to move forward without

1000
01:35:22,230 --> 01:35:27,950
having to track with a board and committee schedule which does take a little bit of time and

1001
01:35:27,950 --> 01:35:33,010
it allows staff to just get that done and there will be I think typically there are regular

1002
01:35:33,010 --> 01:35:39,270
reporting back to this committee of what's been going on so we'll hear about things but that's

1003
01:35:39,270 --> 01:35:44,570
the intention. So, yes, and then, yes, and then board member C. I go.

1004
01:35:45,230 --> 01:35:53,130
Okay, thank you, Minister. I do want to thank staff and I hope the committee is allowing

1005
01:35:53,130 --> 01:35:59,390
us to do this kind of accelerated process to this is the first step. We'll do the second

1006
01:35:59,390 --> 01:36:03,970
step at the regular meeting and then hopefully we'll be able to move forward there. I appreciate

1007
01:36:03,970 --> 01:36:11,010
the consideration by the department to allow us to take this process today.

1008
01:36:11,350 --> 01:36:12,390
So, thank you very much.

1009
01:36:13,390 --> 01:36:14,010
Great, thank you.

1010
01:36:14,030 --> 01:36:14,750
Board members, Diego.

1011
01:36:16,250 --> 01:36:16,610
Thank you, Chair.

1012
01:36:17,530 --> 01:36:25,950
So, after this is approved, and then the people that want to be the MSAs, they submit their form.

1013
01:36:25,990 --> 01:36:30,950
How long do you see it taking for them to get approved by the CIGRD?

1014
01:36:30,950 --> 01:36:39,690
So Madam Chair and Board Member Siego, so we do already have the three applications to become

1015
01:36:39,690 --> 01:36:41,130
a member service area.

1016
01:36:43,230 --> 01:36:48,770
There will, once the standard form agreement, if approved by the Board in June, we will

1017
01:36:48,770 --> 01:36:54,650
be working with the individual water providers on looking at their groundwater reliance on

1018
01:36:54,650 --> 01:36:58,770
the GERD coming up with the minimum reporting requirement.

1019
01:36:58,770 --> 01:37:03,330
the numbers, you'll see there's a blank space in the standard form for the minimum reporting.

1020
01:37:03,570 --> 01:37:07,370
That will be dependent on that portfolio, that individual water providers portfolio,

1021
01:37:08,030 --> 01:37:09,830
and the groundwater allowance that they receive.

1022
01:37:11,210 --> 01:37:14,850
And we can work concurrently as the board is looking to approve this.

1023
01:37:14,950 --> 01:37:18,010
We can work in the next few weeks with some of those providers on those numbers.

1024
01:37:18,310 --> 01:37:22,290
Then there is a process, once the standard form agreement is approved,

1025
01:37:22,290 --> 01:37:32,910
that we give that agreement to the provider, and they do have to execute a resolution, claiming

1026
01:37:32,910 --> 01:37:37,810
that they want to become a member of service area, and that has to be publicly noticed

1027
01:37:37,810 --> 01:37:40,770
in the newspaper for two consecutive weeks.

1028
01:37:41,130 --> 01:37:48,470
Once they execute that resolution, they do the public notice, come back to us with the proof

1029
01:37:48,470 --> 01:37:55,350
of public notice then we can execute that agreement. So there will be another, say, month or so

1030
01:37:55,350 --> 01:38:03,690
of work after the board approves the agreement. But I think we can do all that work,

1031
01:38:03,750 --> 01:38:10,610
legwork to get that provider or providers ready to do that while we're waiting on the board to

1032
01:38:10,610 --> 01:38:16,490
in June. Great, great question. Thank you. Board Member Fisher. Yeah, I just

1033
01:38:16,490 --> 01:38:24,990
clarify a question. So this gives a lot of, I think, flexibility to MSAs, does

1034
01:38:24,990 --> 01:38:30,390
the CAG or D still report the water that has been set aside in our reports or

1035
01:38:30,390 --> 01:38:32,730
does that get reported somewhere else?

1036
01:38:35,500 --> 01:38:37,920
Madam Chair, a Board Member Fisher, when you

1037
01:38:37,920 --> 01:38:45,860
set aside. Do you mean the offset or the, or can you, or if I wait you by the set aside?

1038
01:38:46,260 --> 01:38:52,100
Again, that is water. The alternative supply of the water provider is going out and acquiring

1039
01:38:52,840 --> 01:38:59,980
and reducing their groundwater reliance essentially. So we would, we would likely see the

1040
01:38:59,980 --> 01:39:08,140
result of that in reduced reporting of excess groundwater to us because they're using an alternative

1041
01:39:08,140 --> 01:39:17,260
supply. Their alternative supply is supplementing the groundwater that they were pumping.

1042
01:39:19,720 --> 01:39:25,460
I think that's an excellent subject of another cartoon graphic. Where's the water? I mean,

1043
01:39:25,460 --> 01:39:42,220
It sounds, I mean, we're laughing at it, but not only for us, but for the public and people those graphics really, you know, do a lot to help explain where the water's coming going, who's getting what for why and so, you know, those are, because it is complicated.

1044
01:39:43,220 --> 01:39:44,440
I think showing a juggler would do that.

1045
01:39:44,440 --> 01:39:49,200
There we go. And Barbara, for sure, we'll, we'll sing and juggle while doing that. So anyway,

1046
01:39:49,200 --> 01:39:54,880
If we have no other comments or questions of the committee, I'd like to call Doug Dunham from

1047
01:39:54,880 --> 01:39:59,000
ECCORE up and welcome.

1048
01:40:03,000 --> 01:40:03,760
Thank you, Madam Chair.

1049
01:40:04,940 --> 01:40:08,080
Thank you, committee, for having hearing this.

1050
01:40:08,360 --> 01:40:10,280
I'm here on behalf of ECCORE.

1051
01:40:10,840 --> 01:40:11,960
My name is Doug Dunham.

1052
01:40:12,140 --> 01:40:16,600
I'm the Director of Water Resources for ECCORE USA.

1053
01:40:17,620 --> 01:40:22,140
And if you're not familiar with us, we are the largest private utility in the state of Arizona.

1054
01:40:22,140 --> 01:40:30,180
We managed water drinking water and wastewater systems across the state and if you would squish all of our customers together

1055
01:40:30,180 --> 01:40:32,980
We would be the fourth largest city in the state of Arizona

1056
01:40:32,980 --> 01:40:35,480
So we've got a pretty significant footprint

1057
01:40:36,120 --> 01:40:42,340
I wanted to start off with thanking Laura and her staff on all the work that has got into this up to this point

1058
01:40:42,800 --> 01:40:50,200
We have been talking nearly weekly if not more to work through all the details of this

1059
01:40:50,200 --> 01:40:56,620
I think the plan that they have come up with bringing these two forms forward to you today

1060
01:40:57,180 --> 01:40:58,840
works really, really well.

1061
01:40:59,240 --> 01:41:04,480
We look forward to meeting next week and starting to hammer out the details of our application.

1062
01:41:05,500 --> 01:41:07,960
We were the first to apply at the department.

1063
01:41:08,720 --> 01:41:12,380
And I'm hoping we'll be the first to get through the gate here.

1064
01:41:12,960 --> 01:41:16,020
And just to let you know how significant this is,

1065
01:41:16,020 --> 01:41:24,740
as the chairwoman, so noted at the beginning of this section is this is very monumental for

1066
01:41:24,740 --> 01:41:29,560
the state of Arizona and in fact whoever gets through the gate first here this will be the

1067
01:41:29,560 --> 01:41:36,860
first time in over 30 years that a new provider has been designated under the U.S. water supply program

1068
01:41:36,860 --> 01:41:45,620
in the Phoenix AMA so it's not a small undertaking, it's very significant and from a water resources management

1069
01:41:45,620 --> 01:41:51,900
perspective, management of groundwater provides an excellent opportunity for water providers

1070
01:41:51,900 --> 01:41:56,640
to reduce what we call that legacy pumping.

1071
01:41:57,080 --> 01:42:02,000
So all of the development that is occurred over time outside of the certificate assured

1072
01:42:02,000 --> 01:42:03,340
supply process.

1073
01:42:03,840 --> 01:42:09,600
So your commercial pieces, your circle case, your grocery stores, all those things fall outside

1074
01:42:09,600 --> 01:42:11,780
of the definition of what requires the certificate.

1075
01:42:11,780 --> 01:42:18,380
And this brings that in and it's very beneficial to the aquifer over all.

1076
01:42:19,040 --> 01:42:26,620
And again, with the structure of the eight odds, our actual reliance on groundwater and the

1077
01:42:26,620 --> 01:42:31,040
services of the year, we'll go down over time because every time we bring in a new bucket

1078
01:42:31,040 --> 01:42:35,640
of water, 25% of that has to replace groundwater use.

1079
01:42:35,640 --> 01:42:44,420
So instead of a continual reliance and growth on on the GRD, this actually will limit and shrink over time.

1080
01:42:44,740 --> 01:42:52,700
So I think it's got multiple benefits across both for the GRD and as far as the offer for management of the state.

1081
01:42:53,420 --> 01:42:55,880
And with that, I'll take any questions you may have.

1082
01:42:56,260 --> 01:42:57,520
Great. Thank you. Any questions?

1083
01:42:58,740 --> 01:43:03,040
For that. No. All right. I thank you very much for coming here today and for your comments.

1084
01:43:03,040 --> 01:43:11,040
Um, I'd like to invite Maggie, uh, go, go, go, go, what's your name, go, go, go, go, help me out.

1085
01:43:11,780 --> 01:43:14,260
Maggie, please come.

1086
01:43:15,020 --> 01:43:16,540
Nice to see you.

1087
01:43:27,660 --> 01:43:29,160
Um, that I'm chair member of the committee.

1088
01:43:29,400 --> 01:43:30,560
Members of the committee.

1089
01:43:31,080 --> 01:43:32,620
Um, my name is Maggie Galogley.

1090
01:43:33,300 --> 01:43:37,400
And I'm waiting for one of my nieces or nephews to become super famous.

1091
01:43:37,960 --> 01:43:41,560
So I, so everybody knows how to pronounce my name.

1092
01:43:41,560 --> 01:43:45,760
Some day in the future hasn't happened yet, but thank you first winter.

1093
01:43:46,120 --> 01:43:48,160
Thank you for making me feel the slight bit better.

1094
01:43:49,200 --> 01:43:50,700
No, it happens all the time.

1095
01:43:51,380 --> 01:43:53,840
So, it is Maggie Glogley.

1096
01:43:54,240 --> 01:43:55,720
I'm a attorney at Sennelmore Craig.

1097
01:43:56,460 --> 01:43:59,420
And I'm here today to speak on behalf of Greenstone,

1098
01:43:59,680 --> 01:44:01,440
which is one of our clients.

1099
01:44:01,820 --> 01:44:04,560
They work very closely with a number of water providers

1100
01:44:04,560 --> 01:44:08,180
to try to assist them in acquiring water supplies.

1101
01:44:08,700 --> 01:44:10,860
So, we just wanted just very briefly.

1102
01:44:10,860 --> 01:44:19,080
we appreciate the opportunity to speak today and we just want to express our support for the

1103
01:44:19,080 --> 01:44:26,120
concept of keeping flexibility in these contracts to deal with the minimum reporting requirements

1104
01:44:26,120 --> 01:44:34,180
for excess groundwater. We think that's a very important concept that's built into these contracts

1105
01:44:34,180 --> 01:44:41,980
And because we think that we'll allow GRD to keep their replenishment obligations as low

1106
01:44:41,980 --> 01:44:48,640
as reasonably possible, which will help with this plan of operation and future plans of operation,

1107
01:44:49,420 --> 01:44:57,180
every time you increase the minimum reporting requirement, you are also increasing your GRD obligations.

1108
01:44:57,960 --> 01:44:59,980
So if it goes up to 2-3rds, that high.

1109
01:45:00,000 --> 01:45:18,160
That's a lot more obligation. You have to find water to replenish. And we think it makes a lot of sense to look at each of these member providers individually and try to tailor the minimum obligation, minimum reporting obligation to their circumstances.

1110
01:45:19,000 --> 01:45:29,240
We think that will help GRD. We also think will help the providers because the money they give you for replenishment means they have less money to go out and buy water.

1111
01:45:29,240 --> 01:45:37,640
And that's the whole purpose of ADOS is to let them buy water and try to get off groundwater reliance.

1112
01:45:38,840 --> 01:45:42,900
To avoid the spike or cliff that has already been raised,

1113
01:45:43,560 --> 01:45:49,940
we do think it makes a lot of sense to have a phase in of the minimum reporting obligation

1114
01:45:49,940 --> 01:45:57,280
or minimum reporting requirement, I should say, to allow it to start off at a low level

1115
01:45:57,280 --> 01:46:03,980
when they have these big groundwater allowances and then build up if need be over time

1116
01:46:03,980 --> 01:46:10,200
if that allowance goes down and they have not purchased these alternative water supplies.

1117
01:46:10,860 --> 01:46:21,260
So you could adjust it very pretty easily periotic basis and Greenstone has reached out already

1118
01:46:21,260 --> 01:46:28,700
to GERD staff to talk about one way of doing such a phasin. They probably could be done a lot of

1119
01:46:28,700 --> 01:46:34,880
different ways, but we had a concept that we'd like to discuss with staff. We won't bring it

1120
01:46:34,880 --> 01:46:39,860
forth today because really it's something that we would need to go into a little detail with

1121
01:46:39,860 --> 01:46:46,340
staff, but frankly there's a lot of ways to skin the cat, and we think these contracts do give you

1122
01:46:46,340 --> 01:46:53,720
staff the flexibility to incorporate something like a phase in. So we generally support the

1123
01:46:53,720 --> 01:46:59,940
the way it's been set up for it now. So happy to answer any questions if there are any.

1124
01:47:00,260 --> 01:47:02,960
Great and thank you very much. Any questions for Maggie?

1125
01:47:04,120 --> 01:47:07,220
All right, thank you and thank you very much for coming and speaking today.

1126
01:47:07,620 --> 01:47:12,640
Our final blue card is Terry Sue Rossi with Arizona Water Company.

1127
01:47:16,830 --> 01:47:26,580
Yes, but remember Miller I think well Terry Seeswalking up Doug brought up an interesting kind of interesting fact about this

1128
01:47:27,430 --> 01:47:28,010
whole

1129
01:47:28,010 --> 01:47:29,830
eight hours thing

1130
01:47:29,830 --> 01:47:32,990
If you notice the remember the cartoon with the four houses

1131
01:47:33,710 --> 01:47:37,230
a factory and it looked like an apartment building

1132
01:47:37,230 --> 01:47:41,500
that will maybe this will ease the pain or the the discussion on

1133
01:47:41,500 --> 01:47:49,400
on the, the, you know, that the department complex operations don't pay their fair share.

1134
01:47:49,620 --> 01:47:51,980
So I, I just kind of wanted to point that out.

1135
01:47:52,100 --> 01:47:53,140
I thought that was a good point.

1136
01:47:53,140 --> 01:47:53,600
I think so.

1137
01:47:53,740 --> 01:47:54,040
Yes.

1138
01:47:54,300 --> 01:47:54,340
Yeah.

1139
01:47:54,540 --> 01:47:55,460
The factory.

1140
01:47:55,800 --> 01:48:01,520
And then the high rise, the high rise condos that were in their high rise, the apartments.

1141
01:48:01,880 --> 01:48:01,920
Great.

1142
01:48:02,460 --> 01:48:02,520
All right.

1143
01:48:02,740 --> 01:48:03,180
Thank you.

1144
01:48:03,180 --> 01:48:03,460
Terry Sue.

1145
01:48:05,000 --> 01:48:05,480
Hello.

1146
01:48:05,760 --> 01:48:06,880
Thank you so much.

1147
01:48:07,000 --> 01:48:08,260
My name is Terry Sue Rossi.

1148
01:48:08,340 --> 01:48:11,120
I'm the vice president of Water Resources for Arizona Water Company.

1149
01:48:11,120 --> 01:48:14,240
And I appreciate being here today.

1150
01:48:15,960 --> 01:48:20,520
I first of all, I just wanted to applaud the work of Lauren, her staff.

1151
01:48:21,080 --> 01:48:25,420
I honestly do not expect them to do this in this quick of a timeframe.

1152
01:48:26,020 --> 01:48:28,940
And I know that it was a big lift to do that.

1153
01:48:28,940 --> 01:48:30,060
So I just want to thank you.

1154
01:48:30,720 --> 01:48:34,960
I think it's really important that the cadence of this has been what it is.

1155
01:48:35,320 --> 01:48:38,780
There's just so much pressure to deal with this issue.

1156
01:48:38,780 --> 01:48:48,920
And the panel A may we've been without a new certificate of a Shared Water Supply since July of 2011 if you can believe that and so we're long over due for things to open up

1157
01:48:49,380 --> 01:49:00,060
And so this is a huge step in that direction Doug was alluding to that a little bit and I think so was Laura the significance of this change and so

1158
01:49:01,180 --> 01:49:08,040
Maggie and Doug and I who have been doing this for a very, very long time, I think Laura's younger, younger than us, but

1159
01:49:08,040 --> 01:49:16,100
Anyways, I would argue and I think they would agree that this is the most significant change that we've seen seen to the assured water supply rules

1160
01:49:16,100 --> 01:49:24,240
And since 1995 when they originally passed, so this is a really, really important change

1161
01:49:24,240 --> 01:49:31,840
And just like I would say that the creation of the GRD, it was on the level of, it's on the level of that kind of change.

1162
01:49:32,700 --> 01:49:39,740
So it's exciting to see this happening, it's exciting to see that we're going to see things open up.

1163
01:49:40,480 --> 01:49:44,880
And I'm proud to be a part of the process that got us to this point.

1164
01:49:45,620 --> 01:49:49,180
And I think you should be proud of being a part of this process, too.

1165
01:49:49,180 --> 01:49:54,140
And when Doug was talking I thought, oh my gosh, I should probably say something about my company.

1166
01:49:54,920 --> 01:49:59,780
And so Arizona Water Company is the second largest private water company in the state of Arizona.

1167
01:50:01,000 --> 01:50:06,460
And I like Doug was talking about how I think he said you guys are the third largest or fourth largest.

1168
01:50:06,520 --> 01:50:11,940
So I'm thinking that's Phoenix, Tucson, Mesa, and then they follow closely behind that.

1169
01:50:11,940 --> 01:50:17,040
So I did just a quick check to see where we fell in that and Arizona Water Company, we have

1170
01:50:17,040 --> 01:50:19,280
about 110,000 connections.

1171
01:50:19,980 --> 01:50:24,620
We estimate that's about 300,000 people would just put us right above the next city.

1172
01:50:24,640 --> 01:50:26,400
So I think we're number five.

1173
01:50:27,440 --> 01:50:30,200
So I don't know where Doug you fall into the mix.

1174
01:50:30,240 --> 01:50:30,700
We serve a valid.

1175
01:50:30,700 --> 01:50:32,200
There's not a competition, right?

1176
01:50:32,540 --> 01:50:33,440
There's no competition.

1177
01:50:33,940 --> 01:50:39,820
There's not a competition and everybody who knows me knows that I worked for what was citizens

1178
01:50:39,820 --> 01:50:46,800
before it became Ep Corps. So I've fondness for that organization as well and fondness for

1179
01:50:46,800 --> 01:50:52,900
Doug as well. But I'm going to guess if we're 300, they're probably 400, maybe 1,000 people

1180
01:50:52,900 --> 01:51:01,140
or more. Yeah. I would say 4, maybe 5. And so when you put that together, that kind of just gives

1181
01:51:01,140 --> 01:51:06,300
you an idea of the significance. If you're just looking at the two private largest, the largest

1182
01:51:06,300 --> 01:51:11,300
private water companies. That doesn't include Quink Creek, which you'd have to ask Nicole

1183
01:51:11,300 --> 01:51:15,240
how many they've got, but I'm going to say maybe they're around 120 if I'm just guessing.

1184
01:51:16,480 --> 01:51:23,220
And that doesn't include buck eye. So this is really a very significant change. And so I just

1185
01:51:23,220 --> 01:51:28,500
wanted to make sure everybody really understood kind of where we are at this point in time in history.

1186
01:51:29,920 --> 01:51:33,640
The other thing I wanted to do is I just wanted to describe a little bit how this would work for

1187
01:51:33,640 --> 01:51:39,280
on a water company. And I think this might answer some of the board questions that you all have.

1188
01:51:39,960 --> 01:51:46,460
So, the way that our system is going to work and we're perhaps more blessed than, say,

1189
01:51:46,500 --> 01:51:52,480
Queen Crink and Buckeye are. But we have a CFP entitlement and we're going to be designating our

1190
01:51:52,480 --> 01:52:01,600
canal water system. And that's about 120,000 people itself. And we have a CFP entitlement

1191
01:52:01,600 --> 01:52:08,020
of around 11,000 acre feed. We also have a pretty good chunk of certificates in our area.

1192
01:52:08,600 --> 01:52:12,980
There is a very generous groundwater allowance that will come with those certificates of around

1193
01:52:12,980 --> 01:52:19,000
23,000 acre feet that does not include the allowance. We will be afforded for our legacy pumping.

1194
01:52:20,000 --> 01:52:31,020
And so we plan to file our designation and the exact number that we're going to be coming in for we haven't quite honed in on because there are a few things that are still in flux.

1195
01:52:31,620 --> 01:52:47,200
But our objective is to rely on the gerry as little as possible and to maximize the use of our groundwater allowances and our CAP water.

1196
01:52:47,200 --> 01:52:59,560
We are also in active discussions with our communities about using F-land in particular for the growth and let me describe exactly how we would bring growth into the system and this will get to the 25% offset.

1197
01:53:00,680 --> 01:53:11,280
So we talk about this in terms of we've got a couple of prototype subdivisions who are going to join us in this process to show that this will in fact work and we've been assuming

1198
01:53:11,280 --> 01:53:15,020
acre foot of 300 acre foot of demand for a subdivision.

1199
01:53:16,060 --> 01:53:20,580
And so the way that it's going to work or the way that we're designing it to work is that

1200
01:53:20,580 --> 01:53:26,440
these utilities that we have an arrangement with our community to bring the effluent that they produce the wastewater

1201
01:53:26,440 --> 01:53:30,760
and bring it back and recover it and deliver it back to them volumetrically.

1202
01:53:31,320 --> 01:53:37,180
So roughly let's just say a third of their demand is going to be offset by the effluent that those communities would produce.

1203
01:53:37,180 --> 01:53:46,840
That leaves another 67% of the demand that we're then requiring them to go out and get a non-ground water supply renewable water supply.

1204
01:53:47,400 --> 01:53:55,660
Now, if the act of urban goes through, then that will provide them with some long-term groundwater use, like let's say a third of it.

1205
01:53:55,740 --> 01:53:59,200
But they're still going to have to bring a non-renewable supply to the table.

1206
01:54:00,160 --> 01:54:09,380
We have committed that we will take and change how we use our CAP water in order to make it available as part of the groundwater offset.

1207
01:54:10,300 --> 01:54:15,200
So, every time a new subdivision comes in, we basically multiply their demand by 33%.

1208
01:54:16,020 --> 01:54:20,660
And that in a case of a 300 acre foot subdivision, it would be 100 acre feet.

1209
01:54:20,960 --> 01:54:24,060
And we dedicate that to going back to offsetting our groundwater demands.

1210
01:54:24,060 --> 01:54:52,500
And so that's how we will operate our system so all the new developments will be coming in on a non-ground water supply except for the cases where there would be somebody dependent on act urban and in that case we're going to be looking at probably water resources fee just as Maggie was pointing out one of the things that we want to do is not spend our money and replenishment we want to spend our money on acquiring renewable supplies

1211
01:54:52,500 --> 01:54:54,140
we want to spend our money on acquiring

1212
01:54:54,140 --> 01:54:56,780
extinguishment credits, perpetual extinguishment credits,

1213
01:54:57,520 --> 01:55:01,700
so that we can create a future for our residents.

1214
01:55:01,960 --> 01:55:04,000
We don't want to be living off of replenishment

1215
01:55:04,000 --> 01:55:06,060
obligations for the rest of our lives.

1216
01:55:08,780 --> 01:55:11,840
So the other thing that I was going to just address really quickly,

1217
01:55:11,980 --> 01:55:13,940
because there were some questions about it,

1218
01:55:14,320 --> 01:55:17,020
is how what do we do on the reporting side?

1219
01:55:17,700 --> 01:55:21,480
So I want to give you some confidence that we take that

1220
01:55:21,480 --> 01:55:37,500
function very seriously and I know that Doug does as well and I'm sure Quink Creek does as well but we use our GIS system. We extract the customer data by month out of our customer service system. We connect that to personal data.

1221
01:55:38,000 --> 01:55:48,580
We go through our own very involved quality control to figure out what's going on making sure that it's correct because last thing we want is to turn that over to the GRD

1222
01:55:48,580 --> 01:55:54,260
and then find later that we gave them the wrong number after the tax bill has been paid.

1223
01:55:54,780 --> 01:55:55,960
And so these are our customers.

1224
01:55:56,560 --> 01:55:59,860
These are the constituents that live in the communities that we serve.

1225
01:56:00,420 --> 01:56:04,620
And so it is very important to us that that information is accurate.

1226
01:56:05,300 --> 01:56:08,580
Is it an extremely honest activity at the parcel level?

1227
01:56:08,880 --> 01:56:09,540
Yes it is.

1228
01:56:09,700 --> 01:56:14,720
So I'm looking forward to it moving into the service area mode as we go into the future.

1229
01:56:14,720 --> 01:56:19,720
But I wanted to assure you that that is an activity that we take very, very, very seriously.

1230
01:56:20,640 --> 01:56:26,740
And I'm in charge of it in my company, and I have a very strict standard for that.

1231
01:56:29,490 --> 01:56:36,170
And so with all that, that's to say that we encourage you, and I know I'm not the only one of the finale,

1232
01:56:36,370 --> 01:56:44,530
and we encourage you to support the approval of this standard form agreement of both of them.

1233
01:56:44,530 --> 01:57:01,570
And we're looking forward, we appreciate the streamlined process that you laid out, and we're just very excited to move forward, we're excited to have discussions with Laura and come and fill in the blanks in our agreement, and we are hoping to beat up core.

1234
01:57:03,330 --> 01:57:11,170
To being the first designation of a shared water supply, there was approved under the A-DOS process, so if you have any questions, I'll answer them otherwise.

1235
01:57:11,170 --> 01:57:17,030
Thank you. So there is a tad bit of competition is what I'm hearing. Just a tiny friendly friendly competition

1236
01:57:17,030 --> 01:57:19,130
which is not a bad thing.

1237
01:57:20,570 --> 01:57:30,950
Thank you so much. Thank you so much for your comments and your specific comments and the high level comments on the importance of what we're doing, what we're taking the next step in doing here today.

1238
01:57:31,630 --> 01:57:36,730
So appreciate that. Any other questions or comments from the committee?

1239
01:57:38,050 --> 01:57:43,810
online. Okay, well, I'm just before before I asked for the motion, I'm just going to say really quickly again,

1240
01:57:43,970 --> 01:57:52,730
I commend staff, commend everybody that's been working on this. It is so incredibly complicated and the concepts, the ways that

1241
01:57:53,250 --> 01:58:01,730
it feels like every eventuality has been has been thought of and baked into this agreement and the transitions and

1242
01:58:01,730 --> 01:58:10,730
trying to not have, you know, hills, not cliffs, and transitioning in a manageable way, but

1243
01:58:10,730 --> 01:58:14,650
it's also, I'm hearing, that there's a lot of incentives by these water providers

1244
01:58:14,650 --> 01:58:22,670
to move to the transitioning process to the member service area, but the creative solutions

1245
01:58:22,670 --> 01:58:27,790
and the ways that these agreements have been able to be put together to allow for that.

1246
01:58:27,790 --> 01:58:33,990
I can appreciate it, and I'm just going to also remember that this is all being done.

1247
01:58:34,290 --> 01:58:40,850
While the small staff at the GRD is responding to the DWR on the plan of operation and working

1248
01:58:40,850 --> 01:58:48,230
on their day-to-day business, I don't know if Laura sleeps or her staff, but your hard work

1249
01:58:48,230 --> 01:58:52,250
and your attention to detail is definitely noted and appreciated.

1250
01:58:53,030 --> 01:58:56,150
with that I would ask a board member Miller for a motion.

1251
01:58:56,430 --> 01:58:59,130
I'm happy and proud to provide this motion.

1252
01:59:00,050 --> 01:59:04,190
I move that the committee recommends the board approve the standard

1253
01:59:04,190 --> 01:59:08,390
form a member service area agreement for water providers obtaining

1254
01:59:09,490 --> 01:59:12,730
designations through the A-DOS and

1255
01:59:12,730 --> 01:59:17,110
authorize the general manager to execute them in

1256
01:59:17,110 --> 01:59:18,950
substantially similar form.

1257
01:59:18,950 --> 01:59:26,070
Thank you. And second by board member C. I go. Thank you very much. Any further discussion on the motion?

1258
01:59:27,010 --> 01:59:40,750
Seeing them all in favor. Please say aye. Aye. Aye. Any opposed? All right, let the motion reflect that all members present and online voted in favor of the motion and and good luck on the next steps and and we will be like I said.

1259
01:59:40,750 --> 01:59:43,170
This is recommendation to the board.

1260
01:59:43,750 --> 01:59:51,170
So in a few short weeks, we will be taking this to the full board for the final vote on this.

1261
01:59:51,350 --> 01:59:52,370
Thank you.

1262
01:59:54,490 --> 01:59:59,970
And we are at 2.30, but if we do have our final agenda item for...

1263
02:00:00,000 --> 02:00:06,040
Which is a report on our 2025 member land service area. Can we go for a few, can we go over a little bit, we good?

1264
02:00:06,800 --> 02:00:13,540
Then let's go ahead and complete agenda item eight with Kate Moran's only coming back.

1265
02:00:13,680 --> 02:00:23,920
And the item is the report on the 2025 member land and member service area enrollment and activation through Q1, first quarter of this year and welcome back to the podium.

1266
02:00:23,920 --> 02:00:27,560
Thank you, Madam Chair, and good afternoon for the record.

1267
02:00:27,680 --> 02:00:32,800
My name is Kate Mornzoni, planning analyst with the GRD, and this is a very brief report,

1268
02:00:32,840 --> 02:00:34,260
so it should be going too far over.

1269
02:00:35,740 --> 02:00:43,440
So looking at our activity through Q1 of this year, we have our two standard tables on the

1270
02:00:43,440 --> 02:00:50,080
left are our enrollment numbers, and if they look a little anomalous, that's because they

1271
02:00:50,080 --> 02:00:59,180
So we did have a member land enroll in the East Phoenix AMA and this was mentioned to the committee back in Q3

1272
02:00:59,180 --> 02:01:09,240
I believe that we had a pending application again some developers are just getting their place in line in the event that they're able to get a certificate down the road

1273
02:01:09,240 --> 02:01:13,160
So that enrollment was completed, which is reflected here

1274
02:01:13,980 --> 02:01:19,200
There were actually no other enrollments in either canal or Tucson and Tucson of course

1275
02:01:19,200 --> 02:01:22,840
is still able to get certificates of assured water supply on groundwater.

1276
02:01:23,820 --> 02:01:28,000
So we will stay tuned how that transpires for the rest of the year.

1277
02:01:28,620 --> 02:01:33,200
So because this enrollment was quite substantial we have already surpassed the number of lots in

1278
02:01:33,200 --> 02:01:34,300
world last year.

1279
02:01:34,340 --> 02:01:36,740
That 480 that was in the Tucson AMA.

1280
02:01:36,740 --> 02:01:43,100
So things are changing all the time, and this just really reflects that.

1281
02:01:43,680 --> 02:01:47,900
And our team on the right is for our activation totals.

1282
02:01:48,620 --> 02:02:00,120
On the memberly inside, just over 1,200 lots were activated and a bit more for MSAs, just over 2,100 for a total of 3,341 lots.

1283
02:02:00,760 --> 02:02:06,680
This is a bit lower than Q1 last year and it's hard to know exactly what the reason

1284
02:02:06,680 --> 02:02:11,900
for that is I think a lot of us have been seeing articles on the housing market maybe

1285
02:02:11,900 --> 02:02:16,580
cooling down just a little bit so it's possible that's being reflected here but at the

1286
02:02:16,580 --> 02:02:22,080
same time we do usually see a surge in activations right before rates are adopted in June

1287
02:02:22,080 --> 02:02:25,500
so we'll have to see how Q2 turns out.

1288
02:02:26,940 --> 02:02:34,180
Taking a visual look at our enrollment. The Blackline represents our 2015 plan projection because the

1289
02:02:34,580 --> 02:02:38,420
Jav 2025 plan has yet to be approved. That projection isn't incorporated here

1290
02:02:39,060 --> 02:02:42,200
But you'll notice on the far right we have our first quarter

1291
02:02:42,840 --> 02:02:47,940
bar, which is green. We haven't seen a lot of green the last couple of years and

1292
02:02:47,940 --> 02:02:48,700
our

1293
02:02:48,700 --> 02:02:50,940
operational forecast had about

1294
02:02:50,940 --> 02:02:53,700
450 loss being enrolled in the Tucson AMA

1295
02:02:54,420 --> 02:03:02,960
Again, not expecting any Phoenix enrollments and sometimes we could be surprises, so we'll probably likely end up somewhere close to 450

1296
02:03:02,960 --> 02:03:06,700
Lots being enrolled in the Tucson and they have some point in this year.

1297
02:03:09,350 --> 02:03:12,770
And lastly, I'm looking at our activation so far.

1298
02:03:13,010 --> 02:03:14,350
So again, a bit of a slow start.

1299
02:03:14,710 --> 02:03:19,510
Our operational forecast is expecting about 18,000 lots to be activated.

1300
02:03:20,310 --> 02:03:27,990
So we're not quite the quarter of the way there, but we will see if Q2 has a higher rate of activation.

1301
02:03:29,170 --> 02:03:35,170
And then the other thing to note is more member service area lots were activated than member landlots.

1302
02:03:35,570 --> 02:03:38,210
So MSA lots are represented with the hatched area.

1303
02:03:39,630 --> 02:03:46,890
So nothing exceptionally unusual just a lot of movements in different ways.

1304
02:03:46,890 --> 02:03:49,530
So we will see how the rest of the year transpires.

1305
02:03:50,630 --> 02:03:51,850
Is that how I'm happy to answer any questions?

1306
02:03:52,190 --> 02:03:53,070
Great, thank you very much.

1307
02:03:53,150 --> 02:03:55,110
Any questions for Ms. Lawrenceoni?

1308
02:03:55,610 --> 02:03:56,490
All right, thank you.

1309
02:03:57,870 --> 02:04:00,870
All right, moving on, we are on agenda item number nine,

1310
02:04:00,990 --> 02:04:02,350
which is future agenda items.

1311
02:04:02,750 --> 02:04:08,510
And our next meeting will be on June 12th here at 1230.

1312
02:04:08,530 --> 02:04:11,470
I want to note that this is the second Tuesday of the month

1313
02:04:12,010 --> 02:04:13,730
because our schedule changed

1314
02:04:13,730 --> 02:04:15,210
because of the Juneteenth holiday,

1315
02:04:15,210 --> 02:04:18,630
which would be falling on our regularly scheduled board meeting.

1316
02:04:19,150 --> 02:04:23,910
So just to just, we'll have our board meeting and then the next week we're going to have our

1317
02:04:23,910 --> 02:04:24,530
committee meeting.

1318
02:04:24,570 --> 02:04:30,150
So it's going to be a back-to-back and at that time we will hear update on legislation,

1319
02:04:30,930 --> 02:04:36,730
report on Ag to Urban Rulemaking process and continuing updates on our 2025 plan of operation

1320
02:04:36,730 --> 02:04:45,190
that will also mark our last meeting before our summer recess and just given it's looking at the

1321
02:04:45,190 --> 02:04:51,630
calendar is our next meeting for August is an until late and it's about as late and

1322
02:04:51,630 --> 02:04:57,290
August as you can get. So we'll have quite a break and expect to have a lot to go on

1323
02:04:57,290 --> 02:05:03,990
when we get when we we can be in August. And then item number 10 is our public comment.

1324
02:05:04,170 --> 02:05:09,910
And since we had a robust public comment on item 7, I don't know that we have any other

1325
02:05:10,950 --> 02:05:14,670
comments. Madam Chair, we do not. Yeah, great. Thank you very much. All right.

1326
02:05:14,670 --> 02:05:32,450
Well, again, with my congratulations to the committee for our work, and especially on item 7 today, and to the staff, along with our rates, so let's not, you know, we've got a lot of complex. We don't, you know, we've had an action packed meeting. So, with no further business and my appreciation, we're adjourned.